Capital Gains Tax is chargeable where a gain occurs on the disposal of an asset. If an individual or business disposes of an asset they must file a Capital Gains Tax return by October 31 st of the following year. If a gain arises on the disposal Capital Gains Tax is chargeable on the gain.
If a gain is made on a disposal and a CGT liability arises the tax is payable in the same year unless the disposal occurs in December.
Exempt capital gains.
Assets transferred between spouses and civil partners are exempt from Capital Gains Tax and this includes transfers of assets between spouses and civil partners who are separated if they are made under a Separation Agreement or a court order. The transfer of a site from parent to child is exempt if it is to build the child’s principal private residence. The land must be less than one acre and have a value of €500,000 or less. CGT is not chargeable on assets which are passed on as a result of a death. The assets are treated as if the person who died got the assets at the same value they have on the date of death. If a personal representative disposes of the assets, they are responsible for any gains between the date of the person’s
death and the date of disposal.
- Principal Private Residence Relief
- The disposal of a property lived in and used as a main or only residence is not subject to Capital Gains Tax (Principal
- Private Residence Relief). This relief may also apply if you dispose of a property that you provided for free to a widowed parent or incapacitated relative to use as their sole residence. There are some restrictions to Principal Private
- Residence Relief, including that you can only claim the relief for:
- The part of the house that you used as your home
- The time you lived in the property, with some exceptions for work or health reasons
- The value of the property as you currently use it, rather than for development potential
Other exemptions
- Other exemptions from CGT include gains from:
- Betting, lotteries, sweepstakes and prize bonds
Bonuses payable under the National Instalments Savings Schemes - Government stocks
- Certain life assurance policies
- Moveable property, if the gain is €2,540 or less
- Animals
- Private motor cars
- Rates
The standard rate of Capital Gains Tax is 33% of the chargeable gain. A rate of 40% can apply to the disposal of certain foreign life assurance policies and units in offshore funds.
For certain windfall gains the windfall gains rate of tax is 80%. Deductions Allowable expenses can be deducted from the chargeable gain, including:
- Money you spent that adds value to the asset.
Costs to acquire and dispose of the asset.
An allowable loss made in the same tax year.
The first €1,270 of taxable gains in a tax year are exempt from CGT.
Payment due dates.
For disposals between January 1 st and November 30th the tax pa payable by December 15th that year.
For disposals between Dece4mber 1 st and December 31st the tax is payable by
January 31 st the following year.
Filing a Capital Gains Tax Return
A capital gains tax return must be filed for all disposals by the 31 st October of the following year.
For disposal of assets between January 1 st and November 30th , payment is due by December 15th and the return will be due by October 31 st the following year.
Contact us on 00353 (0)1 4578138 to advise you about all of your Capital Gains Tax obligations.
