Capital Gains Tax

Capital Gains Tax (CGT) is chargeable on gains arising on the disposal of assets, other than that part of a gain which arose in the period prior to 6 April 1974. Any form of property (other than Irish currency) is an asset for CGT purposes.

Rate of Tax

The standard rate is 30% in respect of disposals made from midnight on 6th December 2011. Previous rates were 25% from 7th April 2009, 22% on disposals from 14 October 2008 and 20% in respect of disposals made prior to that date.

A rate of 40% applies to disposals of certain foreign life assurance policies and foreign investment products.

Operation of CGT

The tax is charged based on each tax year (i.e. 1 January to 31 December).

Disposal of an asset includes:

• A transfer by sale, exchange or gift,
• the settlement of an asset on trustees, or
• the receipt of a capital sum derived from assets such as compensation or insurance money in respect of the loss or destruction of an asset or for forfeiture or surrender of rights.

Persons chargeable

• All individuals, companies and other bodies of persons who are resident or ordinarily resident in the State for a year of assessment
• Individuals resident or ordinarily resident, but not domiciled, in the State are chargeable on gains on the disposal of chargeable assets located outside the State if such gains are remitted to Ireland.
• Non-resident persons are chargeable to CGT on gains made on the disposal of ‘specified’ assets such as property.

Due dates for payment of CGT

·       For chargeable gains arising between January and 30 November: 15 December.

·       For chargeable gains arising between 1 December and 31 December: 31 January.

CGT Indexation Factors

Prior to 31 December 2002, the Revenue Commissioners allowed for indexation multipliers to be used in computing allowable expenditure to be deducted. For assets sold post 2003 that were acquired before this date, the indexation multipliers are still allowable in computing allowable expenditure. Indexation does not apply to assets acquired after 31 December 2002.

CGT Exemptions & Reliefs

1.     The first €1,270 of taxable gains by an individual in a tax year is exempt.

2.     Gains realised on the following are not taxable:

• bonuses payable under the National Instalment Savings Scheme and Prize Bond winnings,
• gains realised from life assurance policies and deferred annuity contracts
• gains on the disposal, by an individual, of tangible movable property (i.e. chattels) worth €2,540 or less at the time of disposal;
• gains on the disposal of wasting chattels of whatever value, for example animals, including bloodstock, and private motor cars,
• gains accruing to local authorities and other bodies, and certain gains accruing to sports clubs,
• superannuation funds, trade unions and charities
• gains from betting, lotteries and sweepstakes.
• gains on disposal of a principal private residence
• certain works of art valued at not less than €31,740 where they have been loaned to an approved gallery or the proposed Irish Heritage Trust for a period of not less than ten years for display to the public;

3.     Retirement Relief:

• A gain on the disposal of a business or farm by an individual aged 55 years or older for a consideration not exceeding €500,000 is exempt from capital gains tax.
• There are special allowances where the disposal is to a child or a niece/nephew that works in the business. However, certain conditions must be met.
• Marginal relief applies where the consideration does not greatly exceed that amount.