Irish Capital Gains Tax Guide

What is capital gains tax?

Capital gains tax, or CGT, is a tax charged on any profit you make when disposing of an asset. If you sell an item of property for a higher price than you originally paid for it, you are deemed to have made a capital gain. The difference between the amount you originally paid and the amount you receive from the buyer is treated as taxable income.

Capital gains tax does not apply only where an asset is sold for money. Assets can be disposed of in other ways, such as by way of exchange, gift or settlement on trustees. The current standard rate of capital gains tax is 33% for all gains above the personal allowance, which currently stands at €1,270 per year. However, other rates may apply in particular circumstances.

Who needs to pay capital gains tax?

Capital gains tax is payable by someone who sells or otherwise disposes of an asset and, in doing so, makes a profit. Applicable assets can include property whether owned outright or via a limited legal interest. It also includes intangible assets such as stock options or goodwill in a company.

What CGT tax exemptions exist?

Transfers of assets between spouses or civil partners are wholly exempt from capital gains tax, regardless of the amount. This exemption also applies to separated partners if the transfer is made as part of their separation agreement or a court order.

Transfers of sites from parents to their children for the purpose of constructing a child’s principal private residence is also exempt from capital gains tax, unless the site’s market value exceeds €500,000.

Several other exemptions are available, and it is recommended to seek advice from a tax professional.

When do I need to pay capital gains tax by?

For disposals that take place between 1 January and 30 November, capital gains tax is due by 15 December of the same year. For disposals that occur during December, capital gains tax is due by 31 January of the following year.

How can I submit a return?

You must submit your return by 31 October in the tax year following the disposal. This means that the payment date falls before the filing date. Tax payers who are registered for self assessment should use form 11, and PAYE taxpayers should use form 12. Trusts and estates should use form 1, whilst those not required to make income tax returns should use form CG1. Submissions can be made online, or via a tax agent.

Where can I get a form?

All forms are available from Irish Tax and Customs at www.revenue.ie, or via a tax accountant.