THE Budget allows for greater tax relief for families passing on businesses or farms to younger generations.
In his Budget speech, the Minister said he was raising the rate of tax relief on properties transferred by gift or inheritance from 75 per cent to 90 per cent.
The new 90 per cent rate applies to the transfer of assets, provided these assets are kept in the business or farm for 10 or more years after the transfer.
The relief for farms applies to agricultural, land, buildings, livestock and machinery passed on to relatives.
This is the second substantial increase in capital acquisitions tax (CAT) relief. In effect it means that anyone passing on a business with qualifying assets of £1.85 million or less will not be liable to CAT.
Last year, the Minister increased this relief from 50 per cent to 75 per cent, as part of a concerted move to ease the tax burden on family farms and businesses.
These changes will come into effect immediately.
The increased tax relief for businesses will cost the Exchequer £300,000 in 1997, according to Mr Quinn. In a full year this cost will rise to £900,000.
The cost incurred by extending the tax relief to include the transfer of farm properties is considerable higher.
This year, the Minister expects this will cost the Exchequer £600,000, while in a full year this will rise to £1.8 million.
The Minister has also sanctioned lower capital gains tax rates on the sale of shares in certain small and medium sized companies, or their holding companies.
To qualify, the shares must have been originally purchased in an unquoted company and held for at least three years.
The shares must also be in Irish based trading companies with a market value of not more than £25 million when the shares were first purchased.
This measure will incur no cost to the Exchequer this year, with the full year cost estimated at £200,000.
The Minister has also allowed some relief on the rate of tax levied on savings. Depositors are to receive a 1 per cent reduction in Deposit Interest Retention Tax (DIRT) from April 6th next.
This fall is in line with a one per cent drop in the standard rate of income tax and should encourage more people to channel funds into savings accounts.
The 15 per cent DIRT rate on Special Savings accounts and the 10 per cent rates on Special Investment Accounts and Special Portrolio Investment accounts is to be maintained however. The special tax rate for investment in life assurance companies, Unit Trusts and UCITS (Undertaking for Collective Investment in Transferable Securities) type products has also been reduced.
This rate falls from 27 per cent to 26 per cent also from April 6th next, again moving in line with a one per cent fall in the standard rate of income take.