Capital Gains Tax

About Capital Gains Tax

This tax applies to all chargeable gains. A chargeable gain arises when on disposal of a capital asset such as land, buildings or shares, the consideration received exceeds the original cost of the asset.

A disposal refers to both the sale of an asset or a situation in which the asset is gifted to someone.

Specific rules apply in a situation where an asset is disposed of for no value, at undervalue, or in lieu of an asset whose value cannot be ascertained. The deemed consideration in such circumstances will be taken as the market value of the asset.

A capital loss can occur where the proceeds of sale are less than the original cost of the asset. A capital loss suffered may be used to reduce current or future capital gains on similar assets.

No CGT arises on transfer of an asset on death i.e. as part of a will.

CGT is a self-assessed tax.

The main body of legislation governing the treatment of capital gains and losses in Ireland is the Tax Consolidation Act 1997 (TCA’97).

Tax Reliefs

The most common reliefs are listed below. Please note each relief is subject to specific qualifying conditions which we have not listed.

  • Retirement Relief – exempts the chargeable gain on the sale of all, or part of a business.
  • Entrepreneur Relief – where a business owner sells a business any profit on the sale (i.e. chargeable gain) up to €1m is liable to a reduced rate of CGT of 10%. Any amount above €1m will be liable at 33%.
  • Relief for Farm Restructuring – exempts the chargeable gain on the sale or exchange of qualifying land provided the proceeds are used to purchase or receive land of the same value.
  • Inter-spousal transfers – transfer of an asset to a spouse results in neither a gain nor a loss.
  • Annual Exemption of €1,270 – available to each person in a year to offset against a liability to CGT. The exemption cannot be carried-forward to subsequent years if not used.
  • Exemption for gains if consideration below €2,540
  • Disposal of your family home (principal private residence) the proceeds can be received without any liability to CGT
  • Disposal of a site by a parent to a child to build a family home. The maximum value is € 500K and the site may not exceed one acre.

CGT is a self-assessed tax.

The main body of legislation governing the treatment of capital gains and losses in Ireland is the Tax Consolidation Act 1997 (TCA’97).

Rates of Capital Gains Tax

  • 33%
  • Entrepreneur Relief

Reduces the rate of CGT chargeable on first €1m of gains to 10%. The balance is chargeable at the rate of 33%.

 

Due Dates

  • 15th December – due date for payment of CGT on gains realised between 1st January to 30th November.
  • 31st January – due date for payment of CGT on gains realised in the period from 1st December to 31st December.
  • 31st October – filing of a return for all gains realised in the previous tax year (Jan. to Dec.).

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