Nov 2010 | National Recovery Plan 2011-2014 Capital Taxes Aspects

The following is an extract from the National Recovery Plan announced on 24 November 2010 as it concerns Capital Taxation.

"In recent Budgets the rates for Capital Gains Tax (CGT) and Capital Acquisitions Tax (CAT) were increased from 20% to 25% and the DIRT rate now stands at 25% and 28% for savings products with less frequent payment of interest.
The Plan envisages that this process will continue. The base for CGT and CAT will be broadened while the level of reliefs and exemptions for these taxes will be reduced. In 2012, the current single CGT rate of 25% will be changed to a system of differing rates for different levels of gains. A similar system will be introduced for CAT where the current tax-free thresholds will be reduced to reflect the fall on asset values over recent years and the very generous nature of these thresholds.

In line with the commitments on tax expenditures in this Plan, reliefs and exemptions from CGT, CAT and Stamp Duty will either be abolished or greatly restricted to ensure that there is an adequate base for these taxes and that all of society makes a fair contribution to the correction of the public finances. A cautious estimated yield of just €145 million is included given the uncertainty of current market conditions and asset price values generally.

Action Points

The structures and thresholds in the CAT and CGT systems will be reformed in 2012.

A range of capital tax expenditure will be curtailed.

These measures will yield €145 million in a full year."

For details of all other matters in the Plan see here.


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

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