FINANCE LAW 2011 - TAX CHANGES (PART 1)

FINANCE LAW 2011 - TAX CHANGES (PART 1)

The following changes in tax rates and allowances have been introduced following the Finance Law for 2011.

Inheritance Tax:

Tax free allowance on inter-vivos gifts between spouses and PACS partners increased to 80,724 Euros. The spousal exoneration from inheritance remains.

Tax free allowance between descendants and ascendants (parents and children) increased to 159,325 Euros per beneficiary

Tax free allowance between siblings (where no exoneration) increased to 15,932 Euros each and then tax payable at 35% on the first 24,430 Euros worth of property that is inherited and at 45% thereafter.

Tax free allowance for nieces and nephews increased to 7,967 Euros

Tax free allowance between non-relatives increased to 1,594 Euros

Income Tax:

The Income Tax sliding scale for 2011 (income earned in 2010) is as follows:

0% not exceeding 5 963 EUR
5.50 % between 5 964 EUR and 11 896 EUR
14 % between 11 897 EUR and 26 420 EUR
30 % between 26 421 EUR and 70 830 EUR
41 % above 70 830 EUR

The top rate of income tax has been increased by 1% to 41%.