Business Plus | Tax insights and future trends

Head of Tax, Bryan Farrell recently featured in Business Plus discussing tax insights and future trends.

Activity

Over the past 12 months we have continued to see strong activity in the mergers and acquisitions space both from within our domestic client base and international acquirers looking at opportunities here. We have worked closely with our clients on the accounting and tax due diligence aspects of their transactions. It will be interesting to see if these levels of activity continue into 2025, given the turbulent political times we find ourselves in with the imminent presidential election in the US and the expected general election here.

Upcoming developments

There are significant developments in the pensions space which will be of note to SME businesses and their owners. Firstly, changes to the Standard Fund Threshold regime are to be introduced in the coming years. We will see an increase in the lifetime limit from €2m to €2.8m on a phased basis from 2026 to 2029.

The recently published Finance Bill outlines the mechanics and tax treatment of the Pension Auto Enrolment Scheme, which will come into effect from 30 September 2025. The new regime will operate in a similar manner to other approved pension schemes except for tax relief on employee contributions. As the Government will make a top-up contribution, there will be no tax relief for employee contributions. Employers will receive tax relief on their contributions to the scheme.

Currently, there is no benefit in kind (BIK) charge on employer contributions to an employee/director’s PRSA and there is no limit in respect of same. However, as outlined in the Finance Bill, there will be an overall annual tax relief cap on employer PRSA contributions. The new limit is set at 100% of the emolument of the employee/director for the relevant tax year. Where the contributions exceed that limit a BIK charge will arise. Similarly, where the new limit is exceeded, a company will not be entitled to a deduction for corporation tax purposes in respect of the excess.