Tax Toolkit / Tax Summary / 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) including an interest in property (as, for example, a lease) is an asset for CGT purposes.

Budget 2017: A reduced Capital Gains Tax rate of 10% will apply to the disposal in whole or in part of a business up to an overall limit of €1 million in qualifying chargeable gains. Payments under the new raised bog restoration incentive scheme to relevant owners and rights holders will be exempt from Capital Gains Tax.

The current rate is 33%. Exceptions are a rate of 40% on disposals of certain foreign life assurance policies and units in offshore funds, and rates of 12.5% and 15% on certain venture capital fund managers.

The standard rate in respect of disposals is determined based on the date on which the disposal was made as follows:

Disposals made:

• from 6 December 2012 - 33%
• from 7 December 2011 to 5 December 2012 - 30%
• from 8 April 2009 to 6 December 2011 - 25%
• from 15 October 2008 to 7 April 2009 - 22%
• made on or before 14 October 2008 - 20%

Main Exemptions and Reliefs

• The first €1,270 of net gains, i.e., - gains after allowable prior year and current year capital losses, by an individual in a tax year is exempt. In the case of married couples or civil partners this exemption is available to each spouse or civil partner but is not transferable.
• Private Residence Gains made on the disposal of your home together with its gardens or grounds up to an area (exclusive of the site of the residence) of one acre may be exempt. For full relief to apply, you must have occupied the home as your principal private residence throughout your period of ownership or to within 12 months of the date of disposal. Relief may be restricted where the home was not your main residence throughout the period of ownership (other than the final 12 months), where any part of it was used exclusively for the purposes of a trade, business or profession or where it is sold as development land, for example part of the garden.
• Transfer of a site from parent to child. There is an exemption from CGT if you transfer a site to your child (including certain foster children) where the transfer takes place after 6 December 2000 and is to enable the child construct a principal private residence on the site. For transfers on or after 1 February 2007 the area of the site (exclusive of the area on which the house is to be built) must not exceed 0.4047 hectare, ie 1 acre. The relief is clawed back and charged on the child in certain circumstances.
• Retirement Relief This relief applies where you dispose of certain "qualifying assets". These include assets used for the purpose of a trade, profession or farming and shares in certain family trading companies. You must be least 55 years of age at the time of the disposal and satisfy a number of other conditions. It is not necessary that you retire to claim the relief.
• Entrepreneur Relief - A reduced CGT rate of 10% will apply to the disposal in whole or in part of qualifying business assets up to an overall limit of €1m of chargeable gains
• Relief for Raised Bogs - A CGT relief is being introduced to exempt payments made under an incentive scheme relating to the protection of raised bogs. Details will be contained in the Finance Bill.