Budget 2020: Life and Pensions Update

Oaktree Financial Budget Summary

The Minister for Finance, Public Expenditure & Reform, Paschal Donohoe, delivered Budget 2020 today.

Due to continued uncertainty around the UK leaving the EU, the Minister has formulated Budget 2020 on the assumption of a no-deal Brexit on October 31.

While there were a small number of positives for certain taxpayers, given the backdrop, it is no surprise that this year’s Budget was a “conservative” one.

As expected, there were no pension related changes announced in the Budget speech. These types of changes tend to come through in the subsequent Finance or Social Welfare and Pensions Bills.

The last of the agreed reductions in the rate of Deposit Interest Relief Tax (DIRT) will take place as scheduled, however, we again saw no change to the 41% rate of Exit Tax on gains to life assurance policies.

The Department of Finance published a comparison document between DIRT and Exit Tax in December 2018. One of the conclusions was that the difference in the rates was not a contributing factor when a consumer is considering the type of product to save or invest in. We would not support this view and are disappointed that, once again, the opportunity to equalize the tax treatment for all savers was not taken.

Details of the changes that will be of most interest to pension, protection and investment clients are outlined in our PDF summary which you can download here.