Overtime hours :

From the 1st October 2007 overtime hours worked by all private sector employees, including managers and part-time workers, will be exempt from tax; this will also apply in the public sector, in a revised format. Overtime hours will attract a 25% pay increase on the normal rate, regardless of the size of the business. Employees will not be liable for tax or national insurance contributions on these earnings; businesses will benefit from reduced employer contributions.

Inheritance tax :

95% of households will be exempt from paying inheritance tax. The tax-free allowance on gifts and inheritance per child will increase from 50,000 to 150,000 euros. Finally inheritance tax will be abolished for surviving spouses or civil partners.

Tax-deductible mortgage interest payments :

Tax credits to help towards the purchase of a principal residence will be calculated at 20% of mortgage interest up to an annual interest rate capped at 3,750 euros for a single person and 7,500 euros for a childless couple. This measure applies during the first five years of the loan.

Tax-cuts to benefit the young :

Under-26s who work while studying will be exempt from income tax for earnings up to three times the minimum monthly wage. Gifts to a child, grandchild or great-grandchild will also be tax-free up to a maximum of 20,000 euros per beneficiary.

Tax burden : 

This will be reduced from 60% to 50% (NI contributions included) from January 2008 for tax paid in 2007 on income earnt in 2006.

Capital gains tax :

Households may deduct from their capital gains tax 75% of sums invested in SMBs and in public interest entities, up to a maximum of 50,000 euros per year. This measure could prove particularly beneficial to public research establishments.

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