Irish Finance Minister Unveils Finance Bill - Mr Solbes Not Invited

Amanda Banks, Tax-news.com, London

16 February 2001

The Irish Finance Bill was published yesterday, bearing no obvious signs of the unwelcome attentions of Brussels, but featuring a new savings scheme which has as one of its goals the neutralisation of some of the money sloshing around in the country's economy.

Announcing the scheme, Finance Minister Charlie McCreevy said that the highly attractive scheme would be open for one year from May 1st. Investors in the scheme will have to commit their money for five years, with a maximum of £3,000 per person, but will receive a 25% interest bonus, making the returns effectively tax free for most people. It's estimated that the scheme may cost the exchequer as much as £1bn in lost taxation.

Mr McCreevy also announced a new tax regime for share options which will mean that in approved schemes employees will not have to pay income tax when exercising their share options, but instead will pay capital gains tax at the lower rate of 20%. The Irish high-tech sector had been vociferous in asking for better treatment for the share options that are so vital in attracting and retaining scarce staff.

There are also new rules to simply and enhance tax relief provisions for donations to charities.

The Bill, whose primary purpose is to give effect to last December's budget, confirms the controversial £1.2 billion personal tax cuts which were targeted by the EU Commission.

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