Capital Gains Tax (CGT)

Rate of Tax

To 19/11/08 20%
20/11/08 - 7/4/09 22%
8/4/09 - 6/12/11 25%
7/12/11 - 5/12/12 30%
From 6/12/12 33%

 

Exceptionally, a rate of 40% applies on disposals of certain foreign life assurance policies and units in offshore funds.

In calculating the amount of CGT payable, deductions are allowable for incidental costs of acquisition and disposal, such as solicitor’s fees, stamp duty, auctioneer’s fee, advertising costs.

Reliefs

  • Indexation relief - Where an asset was acquired before 2003 inflation relief may be available, effectively adjusting the cost in line with an inflation factor. On disposals made on or after 1 January 2003, the indexation relief will only apply for the period of ownership of the asset up to 31 December 2002.

 

Year

Rate Year Rate
1974/75 7.528 1989/90 1.503
1975/76 6.080 1990/91 1.442
1976/77 5.238 1991/92 1.406
1977/78 4.490 1992/93 1.356
1978/79 4.148 1993/94 1.331
1979/80 3.742 1994/95 1.309
1980/81 3.240 1995/96 1.277
1981/82 2.678 1996/97 1.251
1982/83 2.253 1997/98 1.232
1983/84 2.003 1998/99 1.212
1984/85 1.819 1999/00 1.193
1985/86 1.713 2000/01 1.144
1986/87 1.637 2001 1.087
1987/88 1.583 2002 1.049
1988/89 1.553 From 2003 on 1.00

 

  • the first €1,270 of taxable gains by an individual in a tax year are exempt. In the case of a married couple this exemption is available to each spouse but is not transferable between them.
  • exemption for the gain on the disposal of an individual’s principal private residence –certain restrictions apply where the residence has development potential.
  • retirement relief for an individual aged 55 years or more on disposal of business (including farming) assets owned for ten years or more (which can also include assets held personally but used in the trade). A cap of €3m is applied if the disponer is aged over 66 if the disposal is to a family member and the exemption for the disposal to a third party is then limited to €500,000. Conditions apply.
  • exemption for the gain on the transfer of a site from a parent to a child provided it is for the construction of the child’s principal private residence and the market value of the site does not exceed €500,000.
  • exemption for the gain on the disposal of property bought between 7/12/11 and 31/12/13 if the property is held for more than 7 years in respect of the gain in that 7 year period. 

 

Payment of CGT
For disposals made in the period 1 January to 30 November the tax is due by 15 December in that tax year.
If the disposal is made in the period 1 December to 31 December the tax is due on 31 January in the following year. 

If the asset is sold by unconditional contract, the disposal for CGT purposes arises on the date of the contract and not the day the contract is completed/closing date (when usually the funds are paid over). This can result in a cash flow issue in having to pay the tax before receiving the proceeds of sale on which the tax is charged.

Territoriality
Individuals resident or ordinarily resident in Ireland who are also domiciled in Ireland are liable to capital gains tax on gains from worldwide disposals.

Individuals resident or ordinarily resident, but not domiciled, in Ireland are liable on gains arising on the disposal of assets situated in Ireland and on all other foreign gains to the extent that those gains are remitted to Ireland.

Individuals neither resident nor ordinarily resident in Ireland are liable on gains made on the disposal of certain “specified” assets.

A guide to CGT is available from Revenue's website here.

 

 

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Aileen Keogan | Solicitor & Tax Consultant | 21 The Avenue | Louisa Valley | Leixlip | Co. Kildare | Ireland

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