Revenue CGT Guide Oct2010

8/8/2019 Revenue CGT Guide Oct2010

1/52

Guide to

Capital Gains Tax


2/52

Contents

Chapter Page

Introduction 3

1. ScopeofCapitalGainsTax 4

2. CapitalGainsTax-Self-Assessment 8

3. CalculationofGainorLoss 10

4. DevelopmentLand 12

5. MainExemptionsandReliefs 14

6. SpecialCategories 19

7. Companies 21

8. Taxationofshares-FIFOrules/BonusandRightsIssues 22

9. Returns,AppealsandPayment-Self-Assessment 25

10. Obligationonpersonsacquiringcertainassetstodeducttax 26

11. Examples 28

Appendix 1 - TableofInation/indexationMultipliers 38

Appendix 2 - CapitalGainsTaxComputationSheets 39

for Self-Assessment

Appendix 3 - GuidanceNotesonCompletionof 42

ComputationSheets

Appendix 4 - ListofRevenueOfcesand 45

OtherInformationSources

Index 47

Guide to Capital Gains Tax

2


3/52

Introduction

1. ThisGuidereectsthelegislationinplaceasat1September2010.Anyrequestsforfurtherinformation,including

informationaboutthetaxationofdisposalsinearlieryears,canbemadetoyourRevenueofceoryoucanview

informationonRevenueswebsitewww.revenue.ie.

AlistofthemainRevenueofces,withaddresses,telephonenumbersande-mailcontactaddressesandsources

ofadditionalinformationissetoutinAppendix 4ofthisGuide.

2. CapitalGainsarisingonthedisposalofawiderangeofassetsarechargeabletoCapitalGainsTax.Thestandard

rateoftaxonCapitalGainsmadeonorafter8April2009is25%.Forcertainwindfallgainsthewindfallgainstax

rateis80%.ForCapitalGainsmadebetween15October2008and7April2009inclusivethestandardrateoftax

onCapitalGainsis22%.ForCapitalGainsmadeonorbefore14October2008thestandardrateoftaxis20%.

However,differentratesapplytodisposalsofcertainforeignlifeassurancepolicies,foreigninvestmentproducts andcertaingainsofventurecapitalfundmanagers.SomeassetsareexcludedfromCapitalGainsTaxandsome

gainsarerelievedfromCapitalGainsTax.

3. CapitalGainsaccruingtopersonsotherthancompaniesarechargeabletoCapitalGainsTax.CapitalGains

accruingtocompaniesarechargeabletoCorporationTax(withsomeexceptions).

4. ThetaxationofcapitalgainsisincorporatedintotheTaxesConsolidationAct1997asamendedbysubsequent

FinanceActs.PreviouslyitwasgovernedbytheCapitalGainsTaxAct1975andtheCorporationTaxAct1976as

amendedbytheCapitalGainsTax(Amendment)Act1978andsubsequentannualFinanceActs.

5. Self-AssessmentrulesapplytoCapitalGainsTax.

6. AllamountsinthisGuideareinEuro.TheconversionratebetweentheEuroandtheIRis1=0.787564.


3


4/52

Chapter 1

Scope of Capital Gains Tax

For Capital Gains Tax purposes a person can mean a body corporate, an unincorporated body as well as an

individual.

1. Persons chargeable

Person resident or ordinarily resident

AnypersonwhoisresidentorordinarilyresidentintheStateforayearofassessmentisliabletotaxonworldwide

chargeablegainsaccruingonthedisposalofchargeableassetsmadeduringthatyear.

InthecaseofanindividualwhoisresidentorordinarilyresidentbutnotdomiciledintheState,gainsrealisedon

disposalsofassetssituatedoutsidetheStateareliabletotaxonlytotheextentthattheyareremittedtothiscountry.

Suchgainsarenotchargeabletotaxuntilsoremitted.Fordisposalspriorto20November2008,gainsonassets

situatedintheUKarechargeableinfull.

Person neither resident or ordinarily resident

ApersonwhoisneitherresidentnorordinarilyresidentintheStateisliabletotaxonlyinrespectofgainsondisposals

ofthefollowingcategoriesofassets-

(a) landandbuildingsintheState,

(b) mineralsintheStateoranyrights,interestsorotherassetsrelatedtoexplorationfor

orexploitationofsuchminerals,

(c) explorationorexploitationrightsinadesignatedareaoftheIrishContinentalShelf,

(d) shares,otherthansharesquotedonaStockExchange,derivingtheirvalueorthe

greaterpartoftheirvaluedirectlyorindirectlyfromassetsin(a),(b)or(c),and

(e) assetsintheStateusedforthepurposesofabusinesscarriedonintheState.

Temporary Non-Residence

Gainsaccruingtoanindividualonthedisposalofcertainshares,orrightstoacquirecertainshares,duringaperiodof

temporarynon-residencemaybechargeabletoCapitalGainsTaxwherethatindividualwasresidentanddomiciledin

theStateatsomestagepriortodeparturefromtheState.


4


5/52

Explanation of the terms Residence, Ordinary Residence and Domicile

1.1 How do I know if I am resident in Ireland for a tax year?

YourresidencestatusforIrishtaxpurposesisdeterminedbythenumberofdaysyouarepresentinIrelandduringa

giventaxyear(1Januarytothefollowing31December).YouwillthereforebearesidentofIrelandineitherofthe

followingcircumstances:

w ifyouspend183daysormoreinIrelandforanypurposeinthetaxyearinquestion

or

w ifyouspend280daysormoreinIrelandforanypurposeoveraperiodoftwoconsecutive

taxyearsyouwillberegardedasresidentinIrelandforthesecondtaxyear.Forexample,ifyou

spend140dayshereinyear1and150dayshereinyear2youwillberesidentinIrelandfor

year2.

(However, if you spend 30 days or less in total in Ireland in either tax year those days will not be reckoned for the

purposes of applying this test.) A day for residence purposes is one on which you are present in Ireland at any time

during the day. For 2008 and previous years a day is one on which you are present in Ireland at midnight.

1.2 What is Ordinary Residence?

ThetermOrdinary Residenceasdistinctfromresidencereferstoanindividualspatternofresidenceoveranumberof

taxyears.IfyouhavebeenresidentinIrelandforthreeconsecutivetaxyearsyouareregardedasordinarilyresident

fromthebeginningofthefourthtaxyear.ConverselyyouwillceasetobeordinarilyresidentinIrelandhavingbeen

nonresidentforthreeconsecutivetaxyears.

1.3 What is Domicile?

Domicileisaconceptofgenerallaw.Itisbroadlyinterpretedasmeaningresidenceinaparticularcountrywiththe

intentionofresidingpermanentlyinthatcountry.Everyindividualacquiresadomicileoforiginatbirth.AnIrish

domicileoforiginwillremainwithanindividualuntilsuchtimeasanewdomicileofchoiceisacquired.However,

beforethatdomicileoforigincanbeshedtherehastobeclearevidencethattheindividualhasdemonstrateda

positiveintentionofpermanentresidenceinthenewcountryandhasabandonedtheideaofeverreturningtolivein

Ireland.AnindividualsdomicilestatuscaninuencetheextenttowhichforeignsourcedgainsaretaxableinIreland.

2. Assets

Allformsofproperty,whereversituated,areassetsforthepurposesofCapitalGainsTax.Assetsincludeforeignland

andbuildings(forexample,holidayhomesandapartments)incorporealproperty(forexample,goodwilloranoption)

andanyinterestinproperty(forexample,alease)butdonotincludeIrishcurrency.However,certainassetsarenot

chargeableassetsandcertaingainsarenotchargeablegains(seeChapter5,paragraphs3and4).

3. Disposal

Disposalofanassetincludesanytransferofownershipoftheassetbywayofsale,exchange,gift,orsettlement

ontrustees.Apartdisposaloccurswherelessthanthewholeofanassetisdisposedoforaninterestinanasset

istransferred(forexample,grantingofaleaseatapremium).Thereceiptofacapitalsumderivedfromanassetis

treatedasadisposalorpartdisposaloftheasset,forexample,compensationorinsurancemoneyforthelossofan

asset,orcompensationforforfeitureorsurrenderofrightsinanasset.Inthecaseofsharesinacompanyormutual

societythereisadisposalforCapitalGainsTaxpurposeswhereapersonreceivescapitalpaymentsinrespectoftheir

shareholding/interestheldinthepayingcompany.

Disposalswhicharenotmadeatarmslength,e.g.gifts,aredeemedtohavebeenmadeatmarketvalue(see

Chapter3,paragraph2).


5


6/52


7/52

10. Time of Disposal and Acquisition

ThemainrulesfordeterminingthetimeofdisposalandacquisitionforCapitalGainsTaxpurposesareasfollows:

w Foradisposalunderanunconditionalcontractthetimeofdisposalandacquisitionisthedatethecontractis

made,notthecompletiondate.

w Wherethecontractissubjecttoacondition,thetimeofdisposalandacquisitionisthedatetheconditionis

satised,notthecompletiondate.Acontractisconditionalifaconditionmustbesatisedbeforeanobligationto performthecontractarises.Forexample,wheretheacquisitionoflandissubjecttothepurchaserobtaining

planningpermission,thetimeofdisposalandacquisitionisthedatethepermissionisobtained.

w Onacompulsoryacquisitionoflandbyanauthoritypossessingtherelevantpowers,typicallybymeansofa

CompulsoryPurchaseOrder(CPO),thetimeofdisposalandacquisitionisthedatethecompensationisagreed

ordeterminedor,ifearlier,thetimeofentrybytheauthorityontheland.Thegainwillnotbetreatedasarisinguntil

theyearinwhichthecompensationisreceived.However,insuchcircumstancesthedatethedisposalismadewill

determinetherateofCGT.

11. Payment of Tax

ThetaxyearisdividedintotwoperiodsforCapitalGainsTaxpaymentpurposes:

w InitialPeriod-1Januaryto30November,bothinclusive

w LaterPeriod-1Decemberto31December,bothinclusive.TheduedatesforCapitalGainsTaxareasfollows:

Disposal Tax Due by

Onorbefore30Novemberinthetaxyear-

Initial Period

15Decemberinthattaxyear

From1Decemberto31Decemberinthetax

year-Later Period

31Januaryinthefollowingtaxyear

Theduedatesforpaymentondisposalspriorto2009weredifferentfromthecurrentdates,thesewere:

Disposal Tax Due by

Onorbefore30Septemberinthetaxyear-

Initial Period

31Octoberinthattaxyear

From1Octoberto31Decemberinthetaxyear-Later Period 31Januaryinthefollowingtaxyear

w WheregainsarechargeabletoCorporationTax(seeparagraph8),theduedateforpaymentisdeterminedby

referencetotheaccountingperiodinwhichthegainsaccrue.


7


8/52

Chapter 2

Capital Gains Tax - Self-Assessment

1. Principal Features

w Self-AssessmentappliestoallCapitalGainsTaxliabilitiesforallpersons,i.e.theself-employedandothersdirectly

assessedtotax,individualsonPAYEandpersonsnotalreadywithinthetaxsystem.

w ReturnsofCapitalGainsmustbemadebytaxpayerswithoutbeingrequiredtodosobyRevenue.

2. Capital Gains Tax -Payment

PaymentofCapitalGainsTaxshouldbeaccompaniedbyaCGTpayslipandshouldbesubmittedto:

OfceoftheRevenueCommissioners, Collector-GeneralsDivision,

SarseldHouse,

FrancisStreet,

Limerick.

BlankpayslipsareavailableonrequestfromtheCollector-GeneralsDivisionbyphoning1890203070,from

Revenueswebsitewww.revenue.ie,orfromanyrevenueofce.IfyouareSelf-Assessedyouwillhaveapayslipon

yourpersonalisedtaxreturn.

3. Return Filing

Areturnofallchargeablegainsandallowablelossesmustbemadeonorbefore31Octoberintheyearfollowingtheyearofdisposal(asforIncomeTaxSelf-Assessment).Theobligationtomakeareturnexistsevenwhereaperson

hasnotbeenissuedwithareturnformbyRevenue,orwherenotaxisduebecauseoftheuseofreliefs,lossesetc.

w PAYEtaxpayersshouldmakethereturnonaForm12

w Self-AssessedindividualsshouldmakethereturnonaForm11EorForm11,

w TrustsandEstatesshouldmakethereturnonaForm1,

w PartnershipsshouldmakethereturnonaForm1(Firms),

w CompaniesshouldmakethereturnonaFormCT1,

w PersonswhoarenotrequiredtomakeanIncomeTaxreturn,includingnon-residents,shouldmakethereturn

onaFormCG1.

TheseformscanbeobtainedfromRevenueswebsitewww.revenue.ie,orfromRevenuesFormsandLeaetsservice

byphoningLoCall1890306706orfromanyRevenueofce.

Alternatively,ifyouwishyoucanleaForm11,Form1,Form1(Firms)orFormCT1electronicallyusingtheRevenue

On-LineService(ROS)andyoumayalsosubmityourreturnofchargeablegainselectronicallyaspartofthe

electronicversionofthereturn.AccessROSatwww.revenue.ie


8


9/52

4. Surcharge

FailuretosubmitareturnontimewillresultinasurchargebeingaddedtothebasicCapitalGainsTaxliability.The

surchargeiseither:

(a) 5%oftheamountofthetaxduesubjecttoamaximumof12,695wherethereturnisdeliveredbefore

31Decemberintheyearfollowingtheendoftheyearofassessment

or

(b) 10%oftheamountofthetaxduesubjecttoamaximumof63,485wherethereturnisnotdeliveredbefore

31Decemberintheyearfollowingtheendoftheyearofassessment.

5. Assessments

ACapitalGainsTaxassessmentwillnormallybemadefollowingthereceiptofareturnofchargeablegains.

Thereisprovisionforthemakingofassessmentsbeforetheendofayearofassessmentincertaincircumstances,for

example,inthecaseofdisposalsbynon-residentpersons.

6. Companies Capital Gains

CompaniesarechargeabletoCapitalGainsTaxonchargeablegainsfromdisposalsofdevelopmentland.The

Self-Assessmentprovisionsoutlinedabovewillaccordinglyapplytocompaniesinrespectofchargeablegainsfromdisposalsofdevelopmentland.

(CompaniesarealreadysubjecttoSelf-AssessmentunderCorporationTaxinrespectofallotherchargeablegains

(seeChapter7))


9


10/52

Chapter 3

Calculation of Gain or Loss

1. Deductible expenditure

Theamountofachargeablegainoranallowablelossisdeterminedbydeductinganyallowableexpenditurefromthe

considerationreceivedforthedisposal.Theallowableexpendituremayinclude:

(a) thecostofacquisitionoftheassetandanyincidentalcostofacquisitionsuchasagentscommissionandcosts

oftransferorconveyance,

(b) expenditureincurredforthepurposeofenhancingthevalueoftheassetwhichisreectedinthestateofthe

assetatthetimeofdisposal;expendituretoestablish,preserveordefendlegaltitle,

and

(c) theincidentalcostsofmakingthedisposal,suchaslegalandsellingcosts.Theamountsunder(a)or(b)abovemaybeadjustedtotakeaccountofination(seeparagraph4below).

Ifanypartoftheconsiderationreceived,ortheexpenditurewithin(a),(b)or(c)above,istakenintoaccountin

computinganyincomeorlossforthepurposesofIncomeTaxorCorporationTaxonincome,itmustbeexcludedfrom

thecalculationofachargeablegainoranallowablelossonthedisposal.Anexceptionismadeinthecaseof

expenditureontheacquisitionofcertainshareswhich,eventhoughtheexpenditurequaliesforrelieffromIncome

Tax,maybedeductedincomputingachargeablegain(butnotanallowableloss)onadisposaloftheshares(see


2. Acquisition or disposal not at arms length

Whenanassetisacquired,ordisposedof,otherwisethanbywayofabargainmadeatarmslength,e.g.gift,itis

treatedasanacquisitionoradisposaloftheassetforaconsiderationequaltoitsmarketvalueatthattime.Thismeansthatwhereapersondisposesofanasseteitherbysaleorbygiftforanamountlessthanitsmarketvalue

theywillbeliabletoCapitalGainsTaxonthedeemedgain.

InstanceswhereCGTisdueonadeemedgainwouldusuallyinvolveconnectedpersons,forexampleaparent

whotransfersassetstotheirchildrenforlittleornopayment.Therecipientoftheseassetsthemselvesmay,

dependingonthecircumstances,havealiabilitytoCapitalAcquisitionsTax(GiftTax)and/orStampDuty.

3. Assets held prior to 6 April 1974

Inthecaseofexpenditureincurredbefore6April1974,theassetisdeemedtohavebeensoldandre-acquiredatits

marketvalueonthatdateandthatmarketvalueistheallowableexpenditureforthepurposeofthecalculationandfor

thepurposeofindexationrelief-seeparagraph4hereunder.


10


11/52

4. Adjustments for ination (indexation relief)

Fordisposalsmadeonorafter1January2003indexationreliefwillonlyapplyfortheperiodofownershipoftheasset

upto31December2002.

Whereindexationreliefdoesapply,youshouldnotethefollowing:

a Iftheexpenditureincurredonacquiringorenhancing((a)or(b)inparagraph1above)anasset,wasincurred

morethantwelvemonthsbeforethedateofitsdisposal,theamountofthatexpendituremaybeadjustedtotake accountofination(subjecttocertainlimitationsinthecaseofdevelopmentland-seeChapter4,paragraph4(i)).

a Theadjustmentismadebymultiplyingtherelevantitemofallowableexpenditurebyafactor,themultiplier,which

reectsthechangeintheAllItemsConsumerPriceIndexduringtheperiodsincetheassetwasacquired.The

multipliertobeapplieddependsontheyearofassessmentinwhichtheexpenditurewasincurredandtheyearof

assessmentinwhichthedisposalismade.

a Ascheduleofmultipliersfortheyears1995/96etseq.issetoutinAppendix 1onpage38ofthisGuide.

a Theadjustmentforinationcannotoperatetochargeanamountinexcessofthemonetarygain,ortotransforma

monetarylossintoagain;neithercanitincreaseamonetarylossortransformamonetarygainintoanallowable

loss.If,asaresultoftheadjustmentforination,alosswouldbesubstitutedforamonetarygain,oragainfora monetaryloss,thedisposaloftheassetistreatedasgivingrisetoneitheragainnoraloss.

5. Assets acquired and/or disposed of in Foreign Currencies

Whereacquisitionsanddisposalsaremadeinforeigncurrenciesthecostofacquisitionandthedisposalproceeds

shouldbeconvertedtoEuroatthedatesofacquisitionanddisposalrespectively.RefertoExample 10,Chapter

11,forapracticalexampleofhowtocalculateachargeablegainandtaxpayablewhereassetsareacquiredand

disposedofinaforeigncurrency.

6. Rate of Tax

ThestandardrateofCapitalGainsTaxfordisposalsmadeonorafter8April2009,includingdisposalsofdevelopment

land,is25%.Forcertainwindfallgainsthewindfallgainsrateoftaxis80%.Therateoftaxfordisposalsmadebetween15October2008and7April2009is22%.ForCapitalGainsmadeonorbefore14October2008the

standardrateoftaxwas20%.However,arateof40%appliestodisposalsofcertainforeignlifeassurancepolicies

andforeigninvestmentproducts,whileratesof12.5%and15%applytocertainventurecapitalfundmanagers.

WherelandhasbeenacquiredunderaCPOforroadbuildingpurposestheappropriaterateoftaxmaybethatin

effectwhenthecompensationpaymentisreceived(seeChapter4,paragraph5formoredetailsofthis).

7. Example

RefertoExample 1,Chapter11,forapracticalexampleofhowtocalculateachargeablegainandtaxpayable.


11


12/52

Chapter 4

Development Land/Windfall Gains

1. Scope of special provisions

Specialprovisions,whicharecontainedinSections648to653TaxesConsolidationAct1997,applytochargeable

gainsfromdisposalsofdevelopmentland,includingshares(otherthansharesquotedonaStockExchange)

derivingtheirvalue,orthegreaterpartoftheirvalue,directlyorindirectlyfromsuchland.Broadly,developmentland

meansland(includingbuildings)intheStatewhichisdisposedofforapricehigherthanitscurrentusevaluei.e.the

valueitwouldhaveifnodevelopmentotherthandevelopmentofaminornaturecouldbecarriedoutinrelationtothe

land.Thespecialprovisionsincluderestrictionsonindexation,roll-overreliefandreliefforlosses(seeparagraph4

below).

2. Consideration not exceeding 19,050

Wherethetotalconsiderationreceivablebyanindividualfordisposalsofdevelopmentlandinanyyearofassessment

doesnotexceed19,050,thegainsonthosedisposalsarenotsubjecttothespecialprovisionsbutaretaxedasif

theyweregainsondisposalsofnon-developmentland.Thisprovisiondoesnotapplytocompanies,trusteesorother

non-corporatebodies.

3. Rate of Tax

Therateoftaxondisposalsofalldevelopmentlandis25%.Forwindfallgainsarateof80%applies(seeparagraph

6formoreinformationonwindfallgains).Fordisposalsbetween15October2008and7April2009theratewas22%.

Fordisposalspriorto15October2008theratewas20%(seeparagraph5forthetreatmentofdisposalsofcertain

farmlandbyCPO).

4. Restriction of reliefs, etc.

Thefollowingrestrictionsapplytothedisposalofdevelopmentland:

(i) Indexationrelief(seeChapter3,paragraph4)isconnedtotheamountofthecurrentusevalueoftheland

atitstimeofacquisitionorat6April1974,ifacquiredpriortothatdate(seeExample 2inChapter11).Also,

indexationreliefisnotavailableonenhancementexpenditure(seeChapter3,paragraph1(b)).

(ii) Roll-overreliefwhich,subjecttoshorttermtransitionalarrangements,wasdiscontinuedfordisposalsafter

3/12/2002appliedtodisposalsofdevelopmentlandonlyinverylimitedcircumstances(furtherdetailsare

availableinearlierGuidestoCapitalGainsTaxavailableonRevenueswebsitewww.revenue.ie).

(iii) Lossesaccruingonthedisposalofassetswhicharenotdevelopmentlandmaynotbeoffsetagainst

developmentlandgains.

(iv) GainsaccruingtocompaniesondisposalsofdevelopmentlandarechargedtoCapitalGainsTaxinsteadof

CorporationTax(seeChapter7,paragraph1).

(v) Whereanindividualdisposesofhis/herprivateresidenceand/oritsgardensorgroundstheprivateresidence

relief(seeChapter5,paragraph5)isrestrictedifthepropertyisdevelopmentland.Thereliefisconnedto

whatitwouldbeifthepropertydidnothavedevelopmentvalue(seeExamples 3 & 4inChapter11).


12


13/52

5. Land disposed of under Compulsory Purchase Order (CPO)

Onacompulsoryacquisitionoflandbyanauthoritypossessingtherelevantpowers,typicallybymeansofaCPO,the

timeofdisposalandacquisitionisthedatethecompensationisagreedordeterminedor,ifearlier,thetimeofentryby

theauthorityontheland.Thegainwillnotbetreatedasarisinguntiltheyearinwhichthecompensationisreceived.

However,insuchcircumstancesthedatethedisposalismadewilldeterminetherateofCGT.

6. Windfall Gains Tax

TheNationalAssetsManagementAgencyActintroducedawindfallgainstaxoncertaincapitalgains.Thistaxis

chargedatarateof80%inrespectofadisposalofdevelopmentlandwherebotharezoningandadisposaltook

placeonorafter30October2009.FinanceAct2010widenedthescopeoftheprovisionbyintroducingaRelevant

PlanningDecision,whichincludesbotharezoningandamaterialcontraventionofadevelopmentplan.Thischange

appliestodecisionsmadeonorafter4February2010.

Arelevantplanningdecisionwill,ingeneralterms,meanachangeinthezoningoflandfromnon-development

land-usetodevelopmentland-useorfromonedevelopmentland-usetoanotherdevelopmentland-use,including

amixtureofsuchuses.Italsoappliestoadecisiontograntpermissionforadevelopmentthatwouldmaterially

contraveneadevelopmentplan.WhiletheOfceoftheRevenueCommissionerscanbecontactedinordertoprovide

fullinformationastothesedenitions,itmaybenecessarytoconsultwiththerelevantlocalauthoritytoestablishifarelevantplanningdecisionhastakenplaceinanyparticularinstance.

The80%rateischargedontheamountbywhichthelandincreasedinvalueasaresultoftherelevantplanning

decision.Theremainderofthegainwillbetaxedatthenormal25%rate.

Thewindfalltaxwillnotapplyinrelationtogainsderivedfromrelevantplanningdecisionswhere:

ThedisposaloflandoccursasaresultofaCPO.

ThedisposalisbyacompanyinwhichtheNationalAssetManagementAgencyownsanypartoftheordinary

sharecapital,orbyacompanywhichisaneffective75%subsidiaryofsuchacompany.

Thedisposalisofasiteof0.4047hectaresorless,whosemarketvalueatdateofdisposaldoesnotexceed 250,000,otherthanwherethedisposalformspartofalargertransactionorseriesoftransactions.This

exemptionappliesregardlessofwhetherplanningpermissionhasbeengrantedforthedisposal.

Awindfallgainmayonlyberelievedbyalossondevelopmentlandtotheextenttowhichthelossisattributabletoa

RelevantPlanningDecision.

Thereareprovisionsincludedtoensurethatthe80%chargecannotbeside-steppedbyatransferbetweenconnected

persons.


13


14/52

Chapter 5

Main Exemptions and Reliefs

1. Indexation

Theexpenditureallowableincomputingthechargeablegainarisingonthedisposalofanassetcanbeincreasedto

takeaccountofinationfortheperiodofownershipofanassetuptothe31December2002(seeChapter3,para-

graph4).Theincreaseis,however,subjecttolimitationinthecaseofadisposalofdevelopmentland(seeChapter

4,paragraph4).Ascheduleoftheination/indexationmultiplierscoveringtheyearsofassessment1995/96etseq.is

setoutinAppendix 1.

2. Personal exemption

Therst1,270ofanindividualsnetgains(i.e.gainslesslosses,includinglossesbroughtforwardfromearlieryears)

arenotchargeable.Thisexemptionisnottransferable,eitherwhollyorpartly,betweenspouses.

Theexemptionappliestoindividualsonly.Itdoesnotapplytocompanies,trusteesorothernon-corporatebodies.

Anon-residentindividualisentitledtotheexemption.

3. Non - chargeable assets

Thefollowingassetsarenotchargeableassetsandnochargeablegainorallowablelosscanariseontheirdisposal-

(i) securities(includingsavingscerticates)issuedundertheauthorityoftheMinisterforFinance,

(ii) landbondsissuedundertheLandPurchaseActs,

(iii) stockissuedbyalocalauthorityoraharbourauthoritymentionedintheFirstScheduletotheHarboursAct,

1946,

(iv) securitiesissuedbytheHousingFinanceAgencyundersection10oftheHousingFinanceAgencyAct,1981,

(v) debentures,debenturestock,certicatesofchargeorotherformsofsecurityissuedbytheESB,BordGis,

RTE,CIE,BordnaMonaorDublinAirportAuthority.Securitiesofthefollowingbodiesarenotchargeableas

setsiftheyissuedbeforetherelevantdateassetoutbelow:

Name of Body Relevant Date

ICCBank 12/2/2001

BordTelecomEireann 15/2/2001 IrishTelecommunicationsInvestments 15/2/2001

ACCBank 28/2/2002

(vi) securitiesissuedbyabodydesignatedundersection4(1)oftheSecuritisation(ProceedsofCertain

Mortgages)Act,1995,

(vii) securitiesissuedintheState,withtheapprovaloftheMinisterforFinance,bytheEuropeanCommunity,the

EuropeanCoalandSteelCommunity,theInternationalBankforReconstructionandDevelopment,the

EuropeanAtomicEnergyCommunityortheEuropeanInvestmentBank,


14


15/52

(viii) securitiesissuedbyAnPostandguaranteedbytheMinisterforFinance,

(ix) securitiesissuedbytheNationalDevelopmentFinanceAgencyundersection6oftheNationalDevelopment

FinanceAgencyAct2002,

(x) certainfuturecontractswhicharebasedontheexemptedassetsmentionedin(i)to(ix).

4. Non - chargeable gains

Certaingainsarenotchargeable,including:

(i) bonusespayableundertheNationalInstalmentSavingsSchemeandPrizeBondwinnings,

(ii) gainsrealisedfromlifeassurancepoliciesanddeferredannuitycontracts,unlesspurchasedfromanother

personortakenoutwithcertainforeigninsurersonorafter20/5/1993,

(iii) gainsonthedisposal,byanindividual,oftangiblemovableproperty(i.e.chattels)worth2,540orlessatthe

timeofdisposal;butthedisposalofasetofarticlestothesameperson,ortoconnectedpersons,orto

personsactinginconcert,istreatedasasingledisposalofoneassetforthepurposesofthe2,450limit,

(iv) gainsonthedisposalofwastingchattelsofwhatevervalue,forexampleanimals,includingbloodstock,and

privatemotorcars,

(v) gainsaccruingtolocalauthoritiesandotherbodies,andcertaingainsaccruingtosportsclubs,

superannuationfunds,tradeunionsandcharities,

(vi) gainsfrombetting,lotteriesandsweepstakes.

5. Principal Private Residence

Full relief

Againonthedisposalbyan individualofadwelling-house(includinggroundsofuptooneacre)isexemptincertain

circumstances.Theexemptionisavailableif,throughouttheindividualsperiodofownership,thehousehadbeen

occupiedbytheindividualashis/heronlyormainresidenceor,undercertaincircumstances,asthesoleresidenceof

adependentrelative.Inthecaseofamarriedcouplelivingtogetheronlyonehousecanqualifyastheonlyormain

residenceofbothspouses.Thisexemptionisnotaffectedbythegrantingofreliefundertherent-a-roomscheme

(Section216ATCA1997).Pleasenotetheconditionsbelowwherepartialreliefmayapply.

Partial Relief

w Fullexemptionmaynotbedueifonlypartofthehousehasbeenusedastheindividualsresidence,inwhichcase

anapportionmentismadetoarriveattheexemptportionofthetotalgain.Thismayhappenwherethehouseis

usedpartlyforbusinesspurposesorwhereroomsinthehousehavebeenlet.

w Theexemptionisalsorestrictedwherethetaxpayerhasnotlivedinthehouseforlongperiods.However,aperiod

ofuptotwelvemonthsimmediatelybeforetheendoftheperiodofownershipistreatedasaperiodofoccupation

eventhoughtheownermaynothavebeenactuallylivinginitduringthatperiod.(seeExample 5inChapter11).

w Whentheprivateresidencecomprisesdevelopmentlandandtheconsiderationexceeds19,050,theprivate

residencereliefisrestricted.Thisincludesthedisposalofagardenorpartofagardenofaprincipalprivate

residenceasdevelopmentland,e.g.ifsoldasasite,orforaccess,rightofwayetc.Norestrictionappliesifthe

consideration(oropenmarketvalue,ifitistransferredinanonarmslengthtransactione.g.gift)doesnotexceed

19,050.


15


16/52

Inadditiontotheabovethefollowingperiodsofabsencefromthehousearealsoregardedasperiodsofoccupation:

(a)

(i) anyperiodthroughoutwhichtheindividualwasemployedoutsidetheState,and

(ii) aperiodofuptofouryearsduringwhichtheindividualwasrequiredbytheconditionsofhis/heremployment

toresideelsewhere.

providingthat,bothbeforeandafterthoseperiods,thehousewastheownersonlyormainresidenceand throughoutthoseperiodshe/shehadnootherhouseeligibleforexemption.

(b)anyperiodofabsenceduringwhichbothofthefollowingcircumstancesapply:

(i) theclaimant(whowouldnormallylivealone)wasreceivingcareinahospital,nursinghomeorconvalescent

home,orwasresidentinaretirementhomeonafeepayingbasis,and

(ii) theprivateresidenceremainedunoccupied.

(c) aperiodofabsenceasin(b)(i)aboveduringwhichtheresidencewasoccupiedrentfreebyarelativeofthe

claimant,forthepurposeofsecurityormaintainingitinahabitablecondition.

6. Transfer of a site from parent to child

ThereisanexemptionfromCapitalGainsTaxonthedisposalofasitefromaparenttoachild(includingcertainfosterchildren)wherethetransferistoenablethechildconstructaprincipalprivateresidenceonthesite.Themarketvalue

ofthesitemustnotexceed500,000(254,000fordisposalspriorto5December2007).Fortransfersonorafter

1February2007theareaofthesite(exclusiveoftheareaonwhichthehouseistobebuilt)mustnotexceed

0.4047hectare,i.e.oneacre.

Thetermdisposalincludesasimultaneousdisposalbybothparentstotheirchild.

Ifthechildsubsequentlydisposesofthesitewithouthavingoccupiedaprincipalprivateresidenceonthesiteforat

leastthreeyears,thenthecapitalgainwhichwouldhaveaccruedtotheparentontheinitialtransferwillaccrueto

thechildinadditiontohis/herowngain.However,thegainwillnotaccruetothechildwhereheorshetransfersan

interestinthesitetoaspouse.

7. Disposal of a business or farm (other than to ones child - see Paragraph 8)

Summary of relief

RelieffromCapitalGainsTaxmayapplywhereanindividual,whoisatleast55yearsofageatthetimeofdisposal,

disposesofthewholeorpartofhis/herqualifyingassets.

Wheretheconsiderationdoesnotexceed750,000(500,000fordisposalspriorto1January2007)reliefisgivenin

respectofthefullamountoftaxchargeableonthedisposal.

Wheretheconsiderationexceeds750,000,marginalreliefappliessoastolimittheamountoftaxchargeableto

one-halfofthedifferencebetweentheamountoftheconsiderationand750,000.

Althoughthereliefiscommonlyknownasretirementreliefaclaimantdoesnothavetoretire(inthepopularsenseof

theword)inordertoqualify.

Lifetime Limit

Itshouldbenotedthatthethresholdof750,000isalifetimelimitfordisposalsofqualifyingassetsonorafter6April

1974madeatatimewhentheindividualwasatleast55yearsofage.Thus,reliefforanyyearistobecomputed

asifallsuchdisposalsforthatyearandearlieryearshadallbeenmadeinthelateryear.Wherethethresholdis

exceeded,anyearlierreliefgivenmaybewithdrawnbymeansofassessmentoradditionalassessment.


16


17/52

Meaning of Qualifying Assets

Thefollowingarequalifyingassetsforthepurposesofthisparagraphandparagraph8.Pleasenotethatsomeof

thetermsusedhavespecicmeaningsforthepurposeoftherelief.Wherenecessaryyoushouldcontactyourlocal

RevenueofceoryourTaxAdvisor.

w thechargeablebusinessassetoftheindividualwhich(apartfromtangiblemovableproperty)he/shehasowned

foraperiodofatleast10yearsendingonthedateofthedisposalandwhichhavebeenhisorherchargeable businessassetsthroughoutthat10yearperiod,

w sharesorsecuritiesheldforatleastthe10yearperiodendingwiththeirdisposalinacompanywhichhasbeen-

atradingorfarmingcompanyandtheindividualsfamilycompany,or

amemberofatradinggroupofwhichtheholdingcompanyistheindividualsfamilycompanyduringatleast

the10yearperiodendingwiththedisposal,andtheindividualhasbeenaworkingdirectorofthecompany

foratleast10yearsduringwhichhe/shehasbeenafull-timeworkingdirectorforatleast5years,

w paymententitlements(seeCouncilRegulation(EC)No.101782/2003of29September2003)where

theyaredisposedofatthesametimeandtothesamepersonasland,totheextentthatthelandwouldsupporta

claimtopaymentinrespectofthosepaymententitlements,

w landandmachineryorplantownedbytheindividualforatleast10yearsendingwiththedisposalwhichland-

wasusedthroughoutthatperiodforthepurposesoftheindividualsfamilycompany(ormemberofthe

tradinggroup),and

isdisposedofatthesametimeandtothesamepersonasthesharesconcerned,

w landleasedunderSchemeofEarlyRetirementfromFarming,whereforaperiodofnotlessthan10yearspriorto

thelandbeingleaseditwasownedbytheindividualclaimingreliefandusedbyhimorherforthepurposesof

farmingthroughoutthatperiod,

w landwhichwasletduringthe5yearperiodpriortoitsdisposalunderacompulsorypurchaseorderforthepurpose

ofroadconstructionandcertainrelatedactivitiesbut,priortoitsrstletting,wasfarmedfor10yearsbytheperson

makingthedisposal,and

w landwhichwasletatanytimeduringthe15yearperiodpriortoitsdisposalbut,priortoitsrstletting,wasfarmed

for10yearsbytheindividualmakingthedisposalandthedisposalistoachild(withinthemeaningofparagraph8

below)oftheindividualconcerned.

Disposal prior to 55th birthday

Whereanindividualdisposesofqualifyingassetsbeforehis/her55thbirthday,Revenuewillconsiderclaimsforrelief

whereallthefollowingconditionsarepresent:

w Theclaimantis,duetosevereorchronicillhealth,unabletocontinuefarming,orinhis/hertrade,profession,

ofceoremploymentorasaworkingdirectorinarelevantcompany,

w Oncessationtheclaimantdisposesofqualifyingassetsandatthattimetheconditionsforrelief,otherthanthe agerequirement,aresatised,

w Atthetimeofdisposaltheclaimantiswithintwelvemonthsofhis/her55thbirthday.

Anindividualclaimingretirementreliefonthesegroundsshouldprovidemedicalevidenceoftheillnessandoutlinethe

circumstancesinwhichthereliefisbeingclaimed.

Thisappliestodisposalsoccurringonorafter14May2004

8. Disposal of a business or farm (to a child)

Irrespectiveoftheamountofconsiderationforthedisposal,fullreliefmaybeclaimedbyanindividualaged55years

oroveronthedisposaltohis/herchild,ofthewholeorpartofhis/herqualifyingassets(seeparagraph7above).


17


18/52

Meaning of child

Forthepurposesofthisparagraphandparagraph7achildincludes

w achildofadeceasedchild,

w anephewornieceoftheindividualmakingthedisposalwhohasworkedfull-timeinrunningorassistinginthe

runningofthebusinessorfarmconcernedforminimumof5yearsendingonthedateofthedisposal.

w afosterchildwhowasunderthecareof,andwasmaintainedattheexpenseof,theindividualmakingthedisposal

foraperiodof5years(orperiodswhichtogetheramountedto5years)uptothetimethatsuchfosterchild

attainedtheageof18years,butonlyiftheclaimforreliefisnotbasedontheuncorroboratedtestimonyofone

witness.

Clawback of relief

Thereliefisclawedbackwherethechilddisposesofanassetwithinsixyearsofthedateofacquisitionfromhis/her

parent.Thereliefiswithdrawnbywayofanassessmentonthechild.Ineffect,thetaxwhichwouldhavebeen

chargedontheparentifthereliefhadnotappliedischargedonthechild,inadditiontoanytaxchargeableonthegain

accruingonthechildsdisposaloftheasset.

9. Roll-over Relief

Thefollowingreliefswerediscontinuedfordisposalsafter3/12/2002;

w Replacementofbusinessandotherassets

w Reliefoncertaininvestmentproperty

w Reliefforindividualsoncertainsharere-investment

w Compulsoryacquisitionrelief

Transitionalprovisionsappliedto31/12/2003(furtherdetailsareavailableinearlierGuidestoCapitalGainsTax

availableonRevenueswebsite www.revenue.ie).

10. Compensation and Insurance Money

Thereceiptofcompensationorinsurancemoneyfordamagetoordestructionofassets,orofsumsfortheforfeiture

orsurrenderofrightsorfortheuseorexploitationofassetsmay,incertaincircumstances,betreatedasadisposal

forCGTpurposes.Theresultantchargetotaxmaybedeferredifthemoneyreceivedisusedinrestoringorreplacing

theasset.Theamountreceivedistreatedasreducingthecostoftheasset(or,inthecaseofthelossordestruction

oftheasset,thecostofreplacingit),andthechargeonthecompensationmoneyisnotimposeduntiltheassetorthe

assetreplacingithasbeendisposedof.Thereliefmustbeclaimeditdoesnotapplyautomatically.

11. Dissolution of farming partnerships

RelieffromCapitalGainsTaxmaybeduewherepartnersinafarmingpartnershipdisposeofassetsonthedissolution

ofthepartnership.Ingeneraltheassetsmusthavebeenownedandusedbythepartnershipforaperiodof10years

priortoitsdissolution.

Wherereliefapplies,anygainonthedisposalwillbetreatedasnotaccruingandthepersonacquiringtheassetwill

betreatedashavingacquireditatthesametimeandforthesameconsiderationasitwasacquiredbythedisponer.

Thereliefdoesnotapplytotradingstock.

Thisappliestodisposalsmadeonorafter13March2008andwillceaseon31December2013.

12. Return of Capital Gains / Losses

Areturnofallchargeablegainsandallowablelossesmustbemadeonorbefore31Octoberintheyearfollowingthe

yearofdisposal(asforIncomeTaxSelf-Assessment).Theobligationtomakeareturnexistsevenwhereaperson

hasnotbeenissuedwithareturnformbyRevenue,orwherenotaxisduebecauseoftheuseofreliefs,lossesetc(seeChapter9).


18


19/52

Chapter 6

1. Married Persons

Thenetgainswhichaccrueinayearofassessmenttoahusbandandwifelivingtogetherarechargedonthe

assessablespouseunlesseitherthehusbandorthewifehasappliedtobechargedseparately.Applicationsfor

separateassessmentmustbemadebefore1Aprilintheyearfollowingtheyearofassessment.

Ingeneral,transfersofassetsbetweenspouseslivingtogetherinayearofassessmentarenottreatedasdisposals

forCapitalGainsTaxpurposes.Instead,thespousereceivingtheassetistreatedashavingacquireditatthesame

timeandforthesameconsiderationasthetransferringspouseoriginallyacquiredit.

Thisgeneraltreatmentdoesnotapplytodisposalsonorafter7December2005wherethespouseacquiringtheasset

wouldnotbewithinchargetoIrishCapitalGainsTaxifheorshedisposedofitintheyearofacquisitionfromtheother

spouse(forexampleifheorshewasresidentoutsidetheStateandbyvirtueofaDoubleTaxationAgreementthegain

couldnotbetaxedhere).

Inadditionthegeneraltreatmentdoesnotapplytothedisposaloftradingstockbetweenspouses.

2. Separated/Divorced Spouses: Transfer of Assets

Whereassetsaretransferredbetweenseparatedordivorcedspousesincertainspeciedcircumstances,e.g.by

virtueorinconsequenceofadeedofseparationoranordermadeonorfollowingjudicialseparationoranorder

madeunderPartIIIoftheFamilyLaw(Divorce)Act1996,thetransferwillnotgiverisetoaCapitalGainsTaxliability.

Instead,thespousereceivingtheassetistreatedashavingacquireditatthetimeandforthesameconsiderationas

thetransferringspouseoriginallyacquiredit(similartoassetstransferredbetweenmarriedpersonsasinparagraph1

above).

Aswithmarriedpersonsthistreatmentdoesnotapplytothetransferofcertainassetsonorafter7December2005or

totradingstockatanytime(seeparagraph1above).

3. Trustees

AtrusteeofasettlementisresponsibleformakinganannualreturnoftheCapitalGainswhichaccruetothetruston

thedisposaloftrustassets.Certainchangesinthebenecialinterestsunderasettlement(e.g.apersonbecoming

absolutelyentitledtosettledproperty)mayalsogiverisetoachargetoCapitalGainsTax.

4. Certain shares

SpecialrulesapplytosharesacquiredundertheincometaxschemesforReliefforInvestmentinCorporateTrades

(BES)andreliefforInvestmentinResearchandDevelopment.Theincometaxreliefgivenforthepurchaseofthesesharesisignoredincomputingataxablegain(but not a loss)ontheirdisposalsothatthegrosscostisdeductible.

5. Partnerships

Partnershipdealingsinassetsaretreatedasdealingsbythepartnersintheirrespectivesharesofthoseassets.


19


20/52

6. Other Special Categories

Special rules apply in the following categories -

(a) disposalstotheState,charitiesandotherbodies.

(b) disposalsofworksofartwhichhadbeenlenttotheIrishHeritageTrustoranapprovedmuseumorgalleryfor

exhibitionfor10years(6yearsiflentbefore2February2006).InrelationtotheIrishHeritageTrustonly loansonorafter1January2006willqualifyforrelief.

(c) disposalsofleaseholdpropertyandthegrantofaleaseatapremium.

(d) transferofabusinesstoacompany.

(e) partdisposalsofassets,and

(f) disposalsbyaliquidatorofacompany,areceiveroramortgagee.

(g) disposalsbysportingbodies.

(h) non-competitionagreements.

InformationonthetreatmentinsuchcasescanbeobtainedfromyourRevenueofce.


20


21/52

Chapter 7

Companies

Taxation of chargeable gains

1. Chargeable gains accruing to companies may be charged either to Capital Gains Tax or

to Corporation Tax as follows -

(a) Capital Gains Tax:

GainsaccruingondisposalsofdevelopmentlandarechargedtoCapitalGainsTax(seeChapter4).Gains

accruingtoanon-residentcompanyonthedisposalofcertainnon-tradingassetssituatedintheStateare

alsochargedtoCapitalGainsTax(seeChapter1,paragraph1).

(b) Corporation Tax:

AllothergainsarechargedtoCorporationTax.Theseincludegainsaccruingtoanon-residentcompanyon thedisposalofassetssituatedintheStateandusedforthepurposeofatradecarriedonbyitintheState

throughabranchoragency.

2. Where the Capital Gains of a company are chargeable to Corporation Tax, thecomputation of the gain is made in accordance with the Capital Gains Tax provisions butthe following special provisions also apply:

(i) TheamountoftheliabilityiscomputedaccordingtotheappropriaterateofCapitalGainsTax.Wherethe

rateofCorporationTaxandtherateofCapitalGainsTaxaredifferentanotionalamountofgainiscalculated

sothatwhenitischargedatthe(different)rateofCorporationTax,thecorrectamountofliabilityisassessed.

Forexample,iftheCapitalGainin2009is10,000@25%=2,500and,say,theappropriaterateof

CorporationTaxfortherelevantaccountingperiodis12.5%,theamounttobebroughtintotheCorporation

Taxassessmentis20,000which,whentaxedataCorporationTaxrateof12.5%,equals2,500.

(ii) Theliabilityisassessedfortheaccountingperiodinwhichthegainaccruedandisincludedwithanyother

protsoftheaccountingperiod.

(iii) Tradinglossesmayonlybeoffsetagainsttradingincomeforthesameandimmediatelyprecedingaccounting

periodonaeuroforeurobasis.Anyunusedtradinglossmaybeoffsetagainstnon-tradingincome,including

chargeablegains,butonlyonavaluebasis.Forexample,ifthecompanyhasanunusedtradinglossin

2009of,say,100,000andachargeablegainof100,000thecompanycangetreliefforthelossattherate

of12.5%againsttheliabilityonthechargeablegain.Taxdueonthechargeablegainis22,000andthe

companycangetlossreliefof12,500leavinganetliabilityof9,500.

(iv) Lossesofacompanyonnon-developmentlandassetsmaybeoffsetagainstchargeablegains-otherthan developmentlandgains-ofthatcompanyonly,inthecurrentaccountingperiodandanyunusedbalancecan

becarriedforward.Lossesonthedisposalofdevelopmentlandcan,however,beoffsetagainstgainsarising

onotherassets.


21


22/52

Chapter 8

Taxation of shares - FIFO rules / Bonus and Rights Issues

1. General

LikeanyotherCapitalGainsTaxcomputation,achargeablegainonthedisposalofcompanysharesisarrivedat

bydeductingthecostoftheshares(adjustedforinationasappropriate)fromthenetconsiderationreceivedforthe

disposaloftheshares-(seeChapter3).

Thecalculationisrelativelystraightforwardwhereapersonacquiresoneblockofsharesandatalaterdate,without

therehavingbeenanychangesinthenumberortype,etc.ofthesharesheld,sellsallorpartofthatholding:

Calculation of gain*

Bought100Ordinary1sharesfor2persharein2004

Sold50Ordinary1sharesfor3persharein2006

Gainis:Proceeds150,lesscost100(50x2)=Gainof50.

*(ignoringindexation,expensesofsaleandpersonalexemptionforeaseofillustration)

Often,however,therewillbeincreasesintheshareholding,eitherbecauseapersonpurchasesadditionalsharesof

thesametypeortheyreceiveadditionalsharesunderbonusorrightsissues.TherearespecialCapitalGainsTax

rulesforthesesituations.

2. First In - First Out (or FIFO rule)

Whereapersonholdssharesofthesameclasswhichhavebeenacquiredatdifferentdates,thesharesacquiredat

theearliertimearedeemedtobedisposedofrst.Forexample:

2001bought1,000Ordinary1sharesinXLtd.for1pershare

2003bought200Ordinary1sharesinXLtd.for1.50pershare

2005bought500Ordinary1sharesinXLtd.for2pershare

2006sold1,500Ordinary1sharesinXLtd.for3pershare

Sold1,500sharesfor4,500in2006

Allowablecost-(ignoringindexationupto31/12/2002)

Using FIFO Rule:

1,000 @ 1.00 = 1,000

200 @ 1.50 = 300

300 @ 2.00 = 600

1,500

Remainingshares2001Ord.inXLtd.acquiredin2005cost2pershare.

(See Example 6, Chapter 11).


22


23/52

Disposal of shares within four weeks of acquisition

TheFIFOrulesaremodiedinanycasewheresharesofthesameclassareboughtandsoldwithinaperiodoffour

weeks.Wheresharesaresoldwithinfourweeksofacquisitionthesharessoldareidentiedwiththeshares

acquiredwithinthatperiod.Furthermore,wherealossaccruesonthedisposalofsharesandsharesofthesame

classareacquiredwithinafourweekperiod,thelossisnotavailableforoffsetagainstanyothergainsarising.

Insteadthelossisonlyavailableforsetoffagainstanygainthatmightariseonthesubsequentdisposaloftheshares

soacquiredinthefourweekperiod-thisprovisiondoesnotapplywherethereisagainonthedisposal.

3. Bonus / Rights issues

Sometimestheholderofaclassofshareswillreceiveadditionalshares,beingeitherabonusissue(noadditional

cost)orarightsissue(foracostwhichisusuallylessthanopenmarketvalue),inrespectoftheirholding.Inthese

situations,despitethefactthatthenewsharesareactuallyacquiredatalaterdate,theyaredeemedtohavebeen

acquiredatthedatetheoriginalsharesgivingrisetothebonusorrightsissuewereacquired.Thus,ifaperson

acquired,say100sharesincompanyXLtd.in2003andin2005received50sharesaspartofabonusorrightsissue

theywillbedeemedtohaveheldtheentireholdingof150sharesfrom2003.

Furthermore,thereisnoquestionofimputinganotionalcostorvalueforthenewsharesacquiredbuttheactualprice

paidtoacquirethesharesunderarightsissueisallowedasenhancementexpenditure-(seeChapter3,paragraph

1(b)).

Bonus Issue

Theeffectoftheaboveonabonusissueisthattheoriginalcostisdilutedbetweentheoriginalsharesandthenew

sharesacquired,forexample:

2003acquired100Ordinary1sharesinXLtd.forsay300(or3pershare)

2005acquired50Ordinary1sharesinXLtd.fornocost(bonusissue1for2)

All150sharesaredeemedtohavebeenacquiredin2003foratotalcostof300.

Therevisedcostpershareis2(i.e.all150sharesaredeemedtohavebeenacquiredin2003foratotalcost

of300whichdilutestheallowablecostpershareto2,300allowablecost150shares).


Rights Issue

Thetreatmentforsharesacquiredunderarightsissueisthesameasforabonusissueexceptthatanallowance

hastobemadefortheamountpaidtoacquiretheadditionalshares.Suchpaymentsaretreatedasenhancement

expenditure,sothatonthesubsequentdisposalofanyoftheshares,partofthecostoftherightsissuewillbe

attributedtothesharessold.Thus,usingthesameguresfromtheexampleimmediatelyabove,butassumingthe

additionalsharesacquiredrepresentedarightsissueforwhichapaymentofsay,150wasmade(3persharein

rightsissue)theresultingpositionwouldbeasfollows:

Again,all150sharesaredeemedtohavebeenacquiredin2003foracostof300,i.e.costof2pershare in2003.Theyarealsodeemedtohaveafurtheradditionalcost(enhancementexpenditure)of150in2005.

Thisenhancementexpenditure(EE)isagaindividedequallybetweenthetotalnumberofsharesheld

(i.e.150150sharesor1pershareEE).Insimpleterms,then,eachshareisdeemedtohavebeenheld

since2004andeachhasanallowablecostof2paidin2003andfurtherenhancementexpenditureof1

paidin2005.



23


24/52

Shares of a different class

Occasionallythesharesreceivedinabonusorrightsissuewillbesharesofadifferentclasstothesharesheld,

e.g.onenewPreferenceshareforeverytwoOrdinarysharesheldandsoon.Wherethishappensthepositionis

essentiallythesameasaboveexceptthatitisnecessarytoapportiontheallowablecost-includingenhancement

expenditureinthecaseofrightsissues-betweenthedifferentclassesofshares.Inthecaseofquotedsharesthis

apportionmentisdoneonthebasisoftherstdaypriceoftherespectiveshareholdingsafterthebonus/rightsissueis

made(forunquotedsharesthisapportionmentisdonebyreferencetotherespectivevaluesofthesharesatthedateofdisposal).



24


25/52

Chapter 9

Returns, Appeals and Payment -Self-Assessment

1. Returns

Areturnofchargeablegainsandallowablelossesmustbemadeonorbefore31Octoberintheyearfollowingthe

yearofassessmentinwhichthedisposaloccurs.TheobligationtomakeaCapitalGainsTaxreturnexistseven

whereapersonhasnotbeenissuedwithareturnformbyRevenue,wherethepersonhasbeenrelievedofthe

obligationtomakeanIncomeTaxreturnorwherenotaxisduebecauseoftheavailabilityofreliefs,lossesetc.

Thereisnoneedtogivedetailsofdisposalsofassetswhicharenotchargeableassets(seeChapter5,paragraph3).

Thereturnshouldincludegainsofthetaxpayersspouseunlessaseparatereturnisbeingsubmittedbyhim/her(see


Generally,detailsofchargeablegainsarereturnedontheIncomeTaxorCorporationTaxreturnforms(seeChapter2,paragraph3formoredetailsonreturnforms).

IfyouhavenotreceivedaTaxReturnformyoucanobtainonefromRevenueswebsite www.revenue.ie,orfrom

RevenuesFormsandLeaetsservicebyphoningLoCall1890306706,or0035316744050forcallersoutsidethe

RepublicofIreland,orfromyourlocalRevenueofce.

Alternatively,ifyouwishyoucanleaTaxReturnelectronicallyusingthe Revenue On-Line Service (ROS)andyou

mayalsosubmityourreturnofchargeablegainselectronicallyaspartoftheelectronicversionofthereturn.Access

ROSatwww.revenue.ie

2. Appeals

ApersoncanappealaCapitalGainsTaxassessmenttotheAppealCommissionerswithin30daysofthenoticeoftheassessment.TheproceduresrelatingtoIncomeTaxappealsalsoapplyforCapitalGainsTax.

3. Payment of the Tax -Self-Assessment

CapitalGainsTaxisaSelf-Assessmenttax,themainfeaturesofwhichareoutlinedinChapter2.Individuals,

TrustsandCompaniesinsomeinstances(seeChapter7,paragraph1(a))must:-for2009andfollowingyearsof

assessment:

w payCapitalGainsTaxasfollows:

ongainsaccruingintheperiod1Januaryto30Novemberinclusive(InitialPeriod)payonorbefore15

Decemberinthatyear,

ongainsaccruingintheperiod1Decemberto31Decemberinclusive(LaterPeriod)payonorbefore31 Januaryfollowingtheendoftheyearofassessment.

w makeareturnofchargeablegainsandallowablelossesonorbefore31Octoberintheyearfollowingtheyearof

assessmentinwhichthedisposaloccurred,

Ifthepaymentislateorinadequate,interestchargesmayarise.Ifthereturnisnotmadeontime,asurchargewillbe

payable(seeChapter2,paragraph4).

Differentduedateswereinplacefordisposalspriorto2009,pleaseseeChapter1paragraph11forthesituation

before2009.


25


26/52

Chapter 10

Obligation on persons acquiring certain assets to deduct tax

1. General

Wheretheconsiderationforthedisposalofcertainassets(seeparagraph2below)exceeds500,000theperson

acquiringtheassetmustdeduct15%ofthepaymentandremitittotheCollector-Generalwithin30days.This

deductionisnotrequiredifthevendorproducesaclearancecerticateForm CG50A,or,inthecaseofnewly

constructedhouses,oneofthecerticatesmentionedinparagraph4below.

TheobligationtodeducttaxdoesnotapplywherethevendorisabodyspeciedinSchedule15TaxesConsolidation

Act1997.Consequently,thosebodiesarenotrequiredtoobtainaclearancecerticate.

2. Relevant assets

Thefollowingaretheassetswhichfallwithinthisprovision:

(a) land(includingbuildings)intheState

(b) mineralsintheStateoranyrights,interestsorotherassetsinrelationtominingormineralsorthesearching

forminerals

(c) explorationorexploitationrightsinadesignatedareaoftheIrishContinentalShelf

(d) unquotedsharesderivingtheirvalueorthegreaterpartoftheirvaluedirectlyorindirectlyfromassetsin

(a),(b)or(c)

(e) unquotedsharesreceivedinexchangeforsharesin(d)wheretheprovisionsofSection584TCA1997apply

totheexchangebyvirtueofthat,oranother,Section

(f) goodwillofatradecarriedonintheState.

Inaddition,theprovisionsalsoapplytocertaintransactionswhichdonotinvolvethepurchaseracquiringanasset

(forexample,theredemptionofloannotesbytheissuingcompanyinvolvesthedisposal,butnottheacquisition,

ofassets).Insuchcircumstancesthepersonpayingthecapitalsumisdeemedtohaveacquiredtheassetfora

considerationequaltothecapitalsum.Capitalsumsmadeunderinsurancepoliciesarespecicallyexcludedfrom

thisprovision.

3. Clearance Certicate -Form CG50A

ThepersonmakingthedisposalmayapplytotheirlocalRevenueofceforaclearancecerticate.Theapplication

shouldbemadeonForm CG50whichisavailableonRevenueswebsitewww.revenue.ieorfromRevenuesForms

andLeaetsServicebyphoningLoCall1890306706.Applicationsmaybemadebythevendorsagent.Anapplication

byanagentmustincludethevendorsnameandaddressand,wherethevendorisresidentintheState,his/her

PersonalandPublicService(PPS)number.Thecerticatewillissueifanyofthefollowingconditionsissatised:

(a) thepersonmakingthedisposalisresidentintheState,or

(b) noCapitalGainsTaxispayableinrespectofthedisposal,or

(c) theCapitalGainsTaxchargeableinrespectofthedisposal(andanypreviousdisposal)oftheassethasbeen

paid.

Ifthevendordoesnothavesufcientfundstopaythetaxat(c)inadvanceofthedisposalRevenuewill,incertain

circumstances,acceptawrittenundertakingfromthevendorssolicitor(seeTaxBrieng62forfurtherinformation).

TheClearanceisgivenonaFormCG50A.


26


27/52

4. Clearance Certicates -New Houses

AsanalternativetoobtainingaFormCG50A(seeparagraph3)wherethevendor,e.g.builder,isdisposingoflandon

whichanewhousehasbeenbuiltorisinthecourseofbeingbuilt,productionofanyoneofthefollowingcerticates

willexemptthepersonpayingtheconsiderationfromdeductingthe15%:

w currentcerticateofauthorisationissuedtothevendorunderSection531TaxesConsolidationAct1997,or

w currenttaxclearancecerticatesissuedtothevendorunderSections1094and1095TaxesConsolidationAct 1997,or

w currenttaxclearancecerticateissuedtothevendorfortheparticularpurposesofSection980TaxesConsolidation

Act1997.

Forthepurposesofthischapter:

houseincludesanybuilding/partofabuildingusedorsuitableforuseasadwelling,andanyoutyard,gardenor

otherlandpertainingtoorusuallyenjoyedwiththatbuilding/partofabuildingand

newhousemeansahousewhichhasbeendeveloped/isbeingdevelopedbyoronbehalfofthevendorbutwhich

hasnotbeenusedatanytimebeforeitsdisposal.

5. Obligation to deduct and remit tax

Ifthevendordoesnotproducetheappropriatecerticatethepurchasermustdeduct15%oftheconsiderationas

capitalgainstaxandtransmittheamountdeductedtotheCollector-Generalwithin30days.Thevendorisentitledto

reliefforthetaxdeducted(seeTaxBrieng56foradviceonhowtoobtainthisrelief).

6. Procedure where consideration is in a non-monetary form

Iftheconsiderationissuchthatthe15%deductioncannotbemade(e.g.whereoneassetisexchangedforanother,

orsharesareissuedasconsideration),andthepersonacquiringtheassetdoesnothaveaclearancecerticate

thatpersonisobliged(withinsevendaysoftheacquisition)togivenoticetotheRevenueCommissionerscontaining

detailsoftheacquisitionandremittotheRevenueCommissionersanamountequalto15%ofthemarketvalueofthe

consideration.


27


28/52

Chapter 11

Examples

ThisChaptercontainsanumberofworkedexamplesforyourassistance.AllamountsareinEuro.Thesituations

coveredareasfollows:

a Example1: Saleofinvestmentproperty

a Example2: Saleofdevelopmentland

a Example3: Saleofprincipalprivateresidencewhichisdevelopmentland

a Example4: Saleofpartofgardenattachingtomainresidence

a Example5: PrincipalPrivateResidencereliefwhereownerhasnotspentallofperiodofownershipindwelling

house

a Example6: SaleofsharesincludingFIFOrule

a Example7: SaleofsharesincludingBonusIssueofshares

a Example8: SaleofsharesincludingRightsIssueofshares

a Example9: SaleofsharesincludingRightsIssue/Sharesofadifferentclass

a Example10: PurchaseandsaleofanassetinForeignCurrency

1. Sale of investment property

InMay2009amarriedcouplesoldahousefor250,000.Thecostofsaleamountedto7,000.Theyboughtthe

houseinJune1973for5,600.Themarketvalueofthehouseat6April1974was6,000.Thecouplehadaddedanextensioncosting4,000tothehouseinMarch1980.

ThehousewasnottheirPrincipalPrivateResidenceanditwasnotDevelopmentLand(seeChapter4).Thecouple

hadotherchargeablegainsinthetaxyear2009whichuseduptheirrespectiveannualcapitalgainsexemption*.

Calculation of gain 2009:

DisposalConsideration 250,000

Less:IncidentalCosts 7,000

NetDisposalConsideration 243,000

Deduct:

Valueon6April1974adjustedforination

i.e.6,000x7.258= 45,168

1980EnhancementExpenditure,adjustedforination:

i.e.4,000x3.742= 14,968 60,136

Chargeable Gain 182,864

*(PersonalExemptionuseduponothergains)

Taxdue,onorbefore,15December2009@25% 45,716.00


28


29/52

Examples (continued)

2. Sale of development land (see Chapter 4)

Aholdingoftenacresofland,whichwasacquiredin1968,wassoldinJune2009forcommercialdevelopment.The

salepricewas300,000andthecostsofdisposalwere10,000.

At6April1974itsmarketvaluewas50,000anditscurrentusevalueatthatdatewas8,000.Thevendorissingleandhadnootherchargeablegainsin2009.Thechargeablegainiscomputedasfollows-



Less:IncidentalCosts 10,000

NetDisposalConsideration 290,000

Deduct:

Valueon6April1974:-

(i) Currentusevalue,adjustedbyindexation i.e.8,000x7.528= 60,224

(ii) Developmentvalue(marketvaluelesscurrentusevalue)

i.e.50,000-8,000= 42,000 102,224

CapitalGain 187,776

LessPersonalExemption 1,270




29


30/52


3. Sale of a principal private residence which is development land (see Chapter 4)

InMay1979amarriedcoupleboughtahouse,theirPrincipalPrivateResidence,foratotalof54,000includingcosts

ofacquisition.Subsequently,thepropertyacquiredcommercialdevelopmentpotentialandtheysellitfor400,000

inDecember2009whenitscurrentusevalueasaprivateresidenceis300,000.Theexpensesofsalewere

10,000.Thecouplehadotherchargeablegainsin2009whichabsorbedtheirrespectiveCapitalGainsTaxannualexemptions*.Thecapitalgainontheabovedisposalisasfollows-


NotionalGain

(Treatasifthehousehadbeensold

for300,000asaprivateresidence)

DisposalConsideration 400,000 (Currentusevalue) 300,000

(10,000x300,000)

400,000

LessIncidentalCosts 10,000 (Proportionofexpensesofsale) 7,500

NetDisposalConsideration 390,000 292,500 (a)

Deduct:

Costadjustedforination:

54,000x3.742 202,068 (adjustedcost) 202,068 (b)

CapitalGain 187,932 [(a)-(b)]=#PPRRelief= 90,432

Principal Private

Residence (PPR) relief # 90,432


*(PersonalExemptionsuseduponothergains)

Taxdue,onorbefore,31January2010@25% 24,375.00


30


31/52


4. Sale of part of garden attaching to main residence (see Chapter 4)

InMay2009anindividualsellspartofhergardenfor100,000.Thecostsofsaleare5,000.Inaddition,valuation

costsof500areincurredforthepurposesofcomputingthecapitalgain.Thenon-developmentvalueofthesiteis

5,000.Thepropertywasoriginallypurchasedon1May1996for250,000.Legalfeeswere4,000andStampDuty

was6,000.Themarketvalueofthepropertyafterthesaleofthesiteis900,000.Thevendorhadotherchargeablegainsin2009whichusedupherannualexemption.Thecapitalgainstax(CGT)payableiscalculatedasfollows-

Step 1:Calculatethegainontheactualproceeds.

Saleproceeds: 100,000

Lesscostsofsale&valuation: 5,500

Netsaleproceeds: 94,500

Lessallowablecostsofacquisition:(Note1) 32,526

Gain: 61,974

Step 2:Calculateanotionalgain,asifthesitewassoldforitsnon-developmentvalue.Thisgainisexemptunderthe

mainresidencereliefprovisions.

Notionalproceeds: 5,000

Lesscostsofsale&valuation:(Note2) 750

Netsaleproceeds: 4,250

Allowablecostsofacquisition:(Note3) 1,796

Gain: 2,454

Step 3:DeductthegainatStep2fromthatatStep1.Thisisthechargeablegain.

Totalgain: 61,974

Lessnotionalgain: 2,454

Chargeablegain: 59,520

Step 4:CalculatetheCGTpayable.

Chargeablegain: 59,520


Note 1:Theallowablecostsofacquisition,i.e.theaggregateofthepurchaseprice,legalfeesandStampDuty,are

apportioned,usingthepartdisposalformula*,betweenwhatisbeingsold&retained.

Allowablecostsofacquisition: 260,000x 100,000 =26,000

100,000+900,000

* A

A+B,whereAisthesalepriceoftheassetandBisthemarketvalueofthepartretained.

Expenditureincurredonorbefore31/12/2002maybeadjustedforindexationbyreferencetoamultiplierbasedon

theAllItemsConsumerPriceIndex.Themultiplierforanassetsoldin2009onexpenditureincurredinthe12monthsended5April1997is1.251.

Theallowablecostsofacquisition,afteradjustmentforindexationare32,526,i.e.26,000x1.251.

Note 2:Thecostsofsaleareapportionedbetweentheactualandnotionalsaleproceeds-

5,000 x 5,000 =250

100,000

Thevaluationcostsareallowableinfullastheywereincurredforthepurposeofcomputingthegainonthesale.

Note 3:Thepartdisposalformula(seeNote1)isnowappliedtothenon-developmentvalueofthesite.

260,000 x 5,000 =1,436

5,000+900,000

Theallowablecostsofacquisition,afteradjustmentforination(seeNote1),are1,796,i.e.1,436x1.251.


31


32/52


5. Principal Private Residence relief where owner has not spent all of period of ownership

in dwelling house (see Chapter 5)

On1January2000anindividualboughtahousefor100,000,includingcosts.Heimmediatelyoccupieditashissole

residenceuntil31December2005whenhewenttoliveinanewapartment.Thehousewasthenrented,theowner

payingincometaxasappropriateontherentreceived.

On30September2009thehousewassoldfor300,000.PrincipalPrivateResidence(PPR)reliefcanbeclaimedfor

theperiodoftimetheownerlivedinthehouse.Ashehasoccupiedthehouseashismainresidence,thenaltwelve

monthsofownershipisalsotreatedasaperiodofoccupancy.Reliefiscalculatedonapro ratabasis.

Calculation of gain 2009


Lessincidentalcostsofsale 10,000

Considerationaftercosts 290,000

Cost,adjustedforination: 100,000x1.193= 119,300

CapitalGain: 170,700

Calculate PPR relief:

Periodofownership:117months

Periodoftimeofoccupation(includinglasttwelvemonthsofownership)84months.

170,700 x 84=122,554

117

122,554ofthegrossgainisrelievedduetoPPRrelief.

CapitalGainamendedforPPRrelief-170,700-122,554= 48,146



Taxdue,onorbefore15December2009@25% 11,719


32


33/52


6. Sale of shares including FIFO rule (see Chapter 8)

InJuly1993anindividual(unmarried)bought2,000ordinarysharesinaquotedcompanyfor2,000(i.e.1.00per

share)

InMay2001heboughtafurther3,000ordinarysharesinthesamecompanyfor4,500(i.e.1.50pershare)

InAugust2005,2,500sharesweresoldandtheproceeds(afterexpensesofsale)amountedto6,500.Hehadno

otherchargeablegaininthetaxyear2005.

InMay2009hesoldtheremaining2,500sharesandtheproceeds(afterexpensesofsale)amountedto7,500.He

hadnootherchargeablegainsinthetaxyear2009.

Calculation of gain:

2005 2009

DisposalConsideration: 6,500 7,500

Deduct:

2000shares*

Costin1993/94adjustedforination

i.e.2,000x1.270= 2,540

500shares 2,500shares

Costin2001 Costin2001

adjustedforination adjustedforination

[email protected] i.e.2,[email protected]

=750x1.087= 815 3,355 =3,750x1.087= 4,076

CapitalGain 3,145 3,424

LessPersonalExemption 1,270 1,270

Chargeable Gain 1,875 2,154

Taxdue@20%** 375.00 Taxdue@25%** 538.50

*Forthepurposeofidentifyingwhatsharesaresold,aFirstin-Firstoutruleapplies.Thismeansthattheshares

acquiredinJuly1993arealldeemedtohavebeensoldin2005inthisexample-seeChapter8,paragraph2.

**Theduedateforthe2009disposalis15December2009therateoftaxis25%.Theduedateforthe2006disposal

was31October,thetaxratewas20%.


33


34/52


7. Sale of shares including Bonus Issue of shares (see Chapter 8)

Anindividualacquiredandsoldsharesasfollows:

January1993 Purchased1,000sharesinXLtd.at2pershare

February1994 BonusIssueofoneforve

July1996 BonusIssueoftwoforthree

October1998 Purchasedfurther500sharesinXLtd.at4pershare

August2001 BonusIssueofoneforve

May2009 Sold2,500sharesfor12,500(i.e.5pershare)

Theoriginalsharesandbonussharesaretreatedastheoneholdingandtheoriginalcostisspreadovertheentire

holding.

January 1993 October 1998

Number Cost Number Cost

SharesPurchased 1,000 2,000 500 2,000

BonusIssueFeb.1994[1:5] 200 - - -

1,200 2,000 - -

BonusIssueJuly1996[2:3] 800 - - -

2,000 2,000 500 2,000

BonusIssueAug.2001[1:5] 400 - 100 -

2,400 2,000 600 2,000

Disposal2007-FIFOrules 2,400 2,000 100 334*

Sharesretainedafterdisposal - - 500 1,666

(+remainingcost)



Deduct:

2,400shares(alldeemedacquiredinJan.93);2,000x1.356= 2,712

100shares

(acquiredinOct.1998);2,000x100

600= 334*x 1.212= 405 3,117

CapitalGain 9,383





34


35/52


36/52


9. Sale of shares including Rights Issue/Shares of a different class (see Chapter 8)

Anindividualacquiredandsoldsharesasfollows:

January1996 Acquired1,000sharesinXLtd.at5pershare(XLtd.isaquotedcompany)

February2000 RightsIssueofonenewPreferenceforeverytwoordinaryheldatcostof4pershare(market

valueoftheordinarysharesatthetimewas20persharewhilethemarketvalueofthePreference

shareswas10pershare.)

a alltheshares(Ord.andPref.)aredeemedtohavebeenacquiredinJan.1996

a thetotalallowablecostofthesharesis5,000(Jan.96)+2,000enhancementexpenditure(Feb.00)

a theallowablecosthastobedividedbetweentheOrdinaryandPreferenceshareshavingregardtotherespective

valuesofthesharesatthetimethenewshareswereacquiredasfollows:

1,000 Ordinary shares

- Originalcost 5,000x20,000 (m.v.ofOrd.atFeb.00)

25,000 (m.v.ofOrd.+Pref.atFeb.00)

=4,000

- Enhancementexpenditure 2,000x20,000

25,000

=1,600

500 Preference shares

- Originalcost 5,000x5,000 (m.v.ofPref.atFeb.00)

25,000 (m.v.ofPref.+Ord.atFeb.00)

=1,000

- Enhancementexpenditure 2,000x5,000 25,000

=400


DisposalConsiderationof400Preferenceshares 6,000

Deduct:

(1) Originalcost(Jan.96)

400

500x1,000=800x1.277= 1022

(2) EnhancementExpenditure(Feb.00)

400

500x400=320x1.193= 382 1,404

CapitalGain 4,596



Taxdue,onorbefore,15December2009@25% 831.50


36


37/52


10. Purchase and sale of an asset using Foreign Currency (see Chapter 3)

AshareholdinginU.K.Ltd.of12,000shareswasacquiredon6July1995atacostofstg24,000,i.e.stg2pershare.

InFebruary1997thebenecialholderofthesesharesmovedpermanentlytoIreland.

On19May2009theholdingof12,000shareswassoldandtheproceeds(afterexpensesofsale)amountedtostg50,755.

Step 1: Convert cost of acquisition

stg24,0000.9629=IR24,925

[Conversionrate,0.9629,dailyrateat6July1995]

Step 2: Convert Irish equivalent cost to Euro

IR24,9250.787564=31,648

[Conversionrate1=0.787564]

Step 3: Convert Disposal Consideration to Euro

Stg50,7550.87940=57,715

[Conversionrate,0.87940,dailyrateat19May2009]

Calculation of Gain 2009:


Deduct:

Costofacquisition,indexedforination;

31,648x1.277= 40,414

CapitalGain 17,301



Taxdue,onorbefore15December2009@25% 4,007.75


37


38/52

Appendix 1

TableofInation/IndexationMultipliersSee reference in Chapter 3, paragraph 4

Multiplier for disposals in year ended Year

Expenditure 5April 5April 5April 5April 5April 5April ShortY/e 31Dec 31Dec 31Dec

Incurred 1996 1997 1998 1999 2000 2001 31Dec 2002 2003 2004

2001 et.seq.

1974/75 5.899 6.017 6.112 6.215 6.313 6.582 6.930 7.180 7.528 7.528

1975/76 4.764 4.860 4.936 5.020 5.099 5.316 5.597 5.799 6.080 6.080

1976/77 4.104 4.187 4.253 4.325 4.393 4.580 4.822 4.996 5.238 5.238

1977/78 3.518 3.589 3.646 3.707 3.766 3.926 4.133 4.283 4.490 4.490

1978/79 3.250 3.316 3.368 3.425 3.479 3.627 3.819 3.956 4.148 4.148

1979/80 2.933 2.992 3.039 3.090 3.139 3.272 3.445 3.570 3.742 3.742

1980/81 2.539 2.590 2.631 2.675 2.718 2.833 2.983 3.091 3.240 3.240

1981/82 2.099 2.141 2.174 2.211 2.246 2.342 2.465 2.554 2.678 2.678

1982/83 1.765 1.801 1.829 1.860 1.890 1.970 2.074 2.149 2.253 2.253

1983/84 1.570 1.601 1.627 1.654 1.680 1.752 1.844 1.911 2.003 2.003

1984/85 1.425 1.454 1.477 1.502 1.525 1.590 1.674 1.735 1.819 1.819

1985/86 1.342 1.369 1.390 1.414 1.436 1.497 1.577 1.633 1.713 1.713

1986/87 1.283 1.309 1.330 1.352 1.373 1.432 1.507 1.562 1.637 1.637

1987/88 1.241 1.266 1.285 1.307 1.328 1.384 1.457 1.510 1.583 1.583 1988/89 1.217 1.242 1.261 1.282 1.303 1.358 1.430 1.481 1.553 1.553

1989/90 1.178 1.202 1.221 1.241 1.261 1.314 1.384 1.434 1.503 1.503

1990/91 1.130 1.153 1.171 1.191 1.210 1.261 1.328 1.376 1.442 1.442

1991/92 1.102 1.124 1.142 1.161 1.179 1.229 1.294 1.341 1.406 1.406

1992/93 1.063 1.084 1.101 1.120 1.138 1.186 1.249 1.294 1.356 1.356

1993/94 1.043 1.064 1.081 1.099 1.117 1.164 1.226 1.270 1.331 1.331

1994/95 1.026 1.046 1.063 1.081 1.098 1.144 1.205 1.248 1.309 1.309

1995/96 - 1.021 1.037 1.054 1.071 1.116 1.175 1.218 1.277 1.277

1996/97 - - 1.016 1.033 1.050 1.094 1.152 1.194 1.251 1.251

1997/98 - - - 1.017 1.033 1.077 1.134 1.175 1.232 1.232

1998/99 - - - - 1.016 1.059 1.115 1.156 1.212 1.212

1999/00 - - - - - 1.043 1.098 1.138 1.193 1.193

2000/01 - - - - - - 1.053 1.091 1.144 1.144

2001 - - - - - - - 1.037 1.087 1.087

2002 - - - - - - - - 1.049 1.049

2003et.seq. - - - - - - - - - 1.000

Note:IntheYearExpenditureIncurredcolumn,forallyearsto2000/2001inclusive,ayearmeansa12month

periodcommencingon6Aprilandendingonthefollowing5April.TheShortyear2001coverstheperiod6/4/2001to31/12/2001.Witheffectfrom1/1/2002ayearisthecalendaryear,i.e.2002referstotheyearended31December

2002.Indexationreliefwillonlyapplyfortheperiodofownershipoftheassetupto31December2002forany

disposalsmadeonorafter1January2003.


38


39/52


40/52

ComputationsheetforDisposalofAssetsother

thanDevelopmentLand

Tax year end 31/12/20_ _

Note

1. DateofDisposal / /

2. Descriptionofasset

3. DateofAcquisition / /

Computation

4. DisposalConsideration

5. LessIncidentalCostsofDisposal(ifany)

6. NetDisposalConsideration(4-5)

Deduct Allowable Costs

7&8. CostofAcquisition xMultiplier( )=

9&10. EnhancementExpenditure (i) xMultiplier( )=

(ii) xMultiplier( )=

11. Totalindexedcost

12. CapitalGain/(Loss)afterindexation(6-11)

13. ActualMonetaryGainor(Loss)[usebrackets()todenoteloss]

14&15. Chargeable Gain

14&15. (Allowable loss) ( )

Ifthereareunusedlossesfrompreviousyearsinserttheamounthere ( )

Calculation of Capital Gains Tax Payable

16. TotalChargeableGainsnetofAllowableLosses

17. Less:PersonalExemption[1,270-ifdue]

NetChargeableGains

Chargeable@25% TaxDue=


18. ForeignLifePolicies@40% TaxDue=

RemembertheCapitalGainsTaxduedatefordisposalsbetween:

w 1Januaryand30November (initial period)is15Decemberinthatyear

w 1Decemberand31December (later period)is31Januaryinthefollowingyear.


40


41/52

ComputationsheetforDisposalofDevelopment

Land

Tax year end 31/12/20_ _

Note

1. DateofDisposal / /

2. Descriptionofasset

3. DateofAcquisition / /

Computation

4. DisposalConsideration

5. LessIncidentalCostsofDisposal(ifany)

6. NetDisposalConsideration(4-5)

Deduct Allowable Costs

7. CostofAcquisitions(enterinbox)

7A&8. CurrentUseValue xMultiplier( )=

8A. Cost(at7)lessCurrentUseValue(noindexation) =

9&10. EnhancementExpenditure (i)-noindexation =

(ii)-noindexation =

11. TotalindexedCosts

12. CapitalGain/(Loss)afterindexation(6-11)

13. ActualMonetaryGainor(Loss)[usebrackets()todenoteloss]

14&15. Chargeable Gain

14&15. (Allowable loss) ( )

Ifthereareunusedlossesfrompreviousyearsinserttheamounthere ( )

Calculation of Capital Gains Tax Payable

16. TotalChargeableGainsnetofAllowableLosses

17. Less:PersonalExemption[1,270-ifdue]

NetChargeableGains



19. WindfallGainsTax@80% TaxDue=

RemembertheCapitalGainsTaxduedatefordisposalsbetween:

w 1Januaryand30November (initial period)is15Decemberinthatyear

w 1Decemberand31December (later period)is31Januaryinthefollowingyear.


41


42/52

Appendix 3

GuidanceNotesonCompletionofComputation

Sheets

Note

1. Date of Disposal

Generallyspeakingthisisthedatethecontractismade,notthecompletiondate(seeChapter1,paragraph10).

2. Description of Asset

Forexample:agriculturalland,developmentland,house,lease,shares,etc.Statearea,quantity,etc.as

appropriate.

3. Date of Acquisition

Generallyspeakingthisisthedatethecontractismade,notthecompletiondate(seeChapter1,paragraph10).

4. Disposal Consideration

Thisisthevalueoftheconsiderationreceivedondisposal,e.g.thesalepriceinthecaseofsaleatarmslength.

Ifthedisposalisnotmadebyabargainatarmslengththentheconsiderationisequaltoitsmarketvalueatthe

timeofdisposal.AnydisposalproceedsreceivedinforeigncurrencymustbeconvertedtoIrishcurrencyby

referencetotherateofexchangeatthetimeofdisposal.

5. Incidental Costs of Disposal

Thisisexpenditurewhollyandexclusivelyincurredbyyouforthepurposesofthedisposal,e.g.costofvaluing,

advertisingandlegalexpenses.

6. Net Disposal Consideration

Thisisthedisposalconsiderationlesstheincidentalcostsofdisposal.

7. Cost of Acquisition

w Incidentalcostsofacquisitionsuchaslegalfeesandstampdutyareallowableaspartofthecost.

w Iftheassetwasacquiredbywayofaninheritanceonadeath,bywayofagiftorontransferfromatrust,itis

themarketvalueatthedateofdeath,giftortransferthatistobeusedhere.

w Iftheassetwasacquiredpriorto6April1974theallowablecosttobeenteredhereisthemarketvalueofthe

assetat6April1974.

w Inthecaseofapartdisposalofanasset,onlypartoftheoriginalcostisallowedhereandacomputation

showinghowthatpartofthecosthasbeencalculatedshouldbeattached.

w Specialrulesapplytothedisposalofaleasewithlessthan50yearstorun,soastoreducetheallowablecost

oftheleasebyreferencetothenumberofyearsforwhichitwasheld.

w WheretheacquisitionwasmadeinforeigncurrencythecostsofacquisitionmustbeconvertedtoIrish

currencybyreferencetotherateofexchangeatthetimeofacquisition.


42


43/52

7A. Current Use Value

Thisonlyappliesonthedisposalofdevelopmentland.Inthecomputationofgainsonthedisposalof

developmentlandonlythecurrentusevalueatdateofacquisition,orat6April1974ifacquiredearlier,maybe

indexedforination.

8. Multiplier

Theination/indexationmultiplierfordisposalsinvarioustaxyearsaresetoutinAppendix 1.Thechartin

Appendix 1contains,foreaseofreference,detailsoftherelevantinationfactorsfortheyearsofassessment

1995/96etseq.

Note: (a) See7Aaboveredevelopmentland.

(b) Fordisposalsmadeonorafter1January2003indexationreliefappliestoexpenditureincurredup

to31December2002.

8A. Cost Less Current Use Value

Inthecomputationofthegainonthedisposalofdevelopmentlandthecostor,ifacquiredearlier,themarket

valueat6April1974lessthecurrentusevalueatthatdate,isallowedwithoutindexation.

9. Enhancement Expenditure

Thisisthecostofadditionstotheasset,afterthedateofacquisition,whichaddstothevalueoftheassetandis

reectedinthestateoftheassetatthedateofsale.Exampleswouldbelandscaping,additionofagarage,

conservatory.Itdoesnotincluderoutinemaintenancesuchaspainting.

10. Multiplier

w ThemultipliertobeappliedheremustbebyreferencetotheyearinwhichtheEnhancementExpenditureat9

wasincurred.SeeAppendix 1forthetable.

w NoindexationofEnhancementExpenditureisallowedfordisposalsofdevelopmentland.

11. Total Indexed Cost

w Thisistheaggregateofthecostofacquisitionandenhancementexpendituredulyindexedforinationwhere

applicable.

w Inthecaseofdevelopmentlanditisthecurrentusevalueat7Amultipliedbytheappropriatemultiplierat8,

plustheallowablecostlesscurrentusevalue,at8A,plusenhancementexpenditure,ifany,at9.

12. Capital Gain (Loss) after indexation

Ordinarilythegainascalculatedhereisthechargeablegaintobeenteredonthereturnformbut,inthecaseof

anindexedlossorwheredeemedmarketvalueat6April1974hasbeenusedinthecomputation,the

chargeablegainorallowablelossmayrequiretobeadjustedbyreferencetotheactualmonetarygainorloss.

Seenotes14and15.

13. Actual Monetary Gain or Loss

Thisistheactualgainorlossoverallbyreferencetotheoriginalcostwithoutanyallowanceforination.


43


44/52

14&15. Chargeable Gain or Allowable Loss

(a) Ifthereisagainshownat12enteritat14also,unless:

wthereisamonetarygainat13whichissmaller,inwhichcaseenterthesmallergure,or

wthereisamonetarylossat13,inwhichcasetreatthedisposalasgivinganogain/noloss

result.

(b) Ifthereisalossshownat12enteritat15also,unless:

wthereisamonetarylossat13whichissmaller,inwhichcaseenterthesmallergure,or

wthereismonetarygainat13,inwhichcasetreatthedisposalasgivinganogain/noloss

result.

16. Total Chargeable Gain

w Thisisthetotalchargeablegainsfrombothdevelopmentlandandnon-developmentlandgainsless

anyallowablelosses.

w Theallowablelossesincludelosses(ifany)broughtforwardasstillunusedfrompreviousyears.Note,

however,thattheonlylosseswhichmaybesetoffagainstgainsondevelopmentlandarelosses

whichhavebeenincurredondisposalsofotherdevelopmentland.

17. Personal Exemption

Therst1,270ofanindividualsnetgainsisnotchargeable.Thispersonalexemptionisnottransferable

betweenspousesandappliestoindividualsonly.Ifthereismorethanonedisposalduringtheyearandthe

personalexemptionhasbeenutilisedinfullintherstcomputationthennoentryisrequiredhere.A

non-residentindividualisentitledtothepersonalexemption.

18. Foreign Life Policies

Ifyousold,madewithdrawalsfromorreceivedanycashorotherbenetsfromaforeignlifeinsurance

policyasreferredtoinChapter6Part26oftheTCA1997,youmayhavemadeagainfromtheForeign

LifePolicytowhichthefollowingratesoftaxwillapply:

wIfthedisposalwasmadeonorafter8April2009anddetailsofthegainare correctlyincludedinareturn

andthepolicyisnotaPersonalPortfolioLifepolicywithinthemeaningofSection730BA(2)TCA1997,

thechargetoIncome Taxisat28%.

wIfthedisposalwasmadeonorafter1January2009andbefore8April2009anddetailsofthegain

arecorrectlyincludedinareturnandthepolicyisnotaPersonalPortfolioLifepolicywithinthemeaning

ofSection730BA(2)TCA1997,thechargetoIncome Taxisatthestandard rate of income tax + 6%.

wIfthedisposalwasmadeonorafter1January2001andbefore1January2009anddetailsofthegain

arenot correctlyincludedinareturn,thechargetoCapital Gains Taxwillbetheun-indexedrelevant

gain withinthemeaningofSection594TCA1997,taxedata Capital Gains Tax rate of 40%.

Forinformationonchargeablegainsandratesofchargefordisposalperiodspriorto1January2001as

wellastheratesofincometaxapplyingtogainsonPersonalPortfolioLifePolicieswithinthemeaningof

Section730BA(2)TCA1997,youshouldcontactyourRevenueofce.

19. Windfall Gains Tax

The80%rateischargedontheamountbywhichthelandincreasedinvalueasaresultoftherelevant

planningdecision.Theremainderofthegainwillbetaxedatthenormal25%rate(seeChapter4,

paragraph6).


44


45/52

Appendix 4

ListofRevenueOfcesandOtherInformationSourcesAContactLocatoronRevenueswebsite www.revenue.ieenablescustomerstospeedilyascertainappropriate

Revenuecontactdetailsapplicabletothemselves.Theseincludetelephonenumber,e-mailandpostaladdress,fax

numberandtheappropriateofceforpersonalcallers.Thesedetailsmaybeeasilyaccessedbycustomerswhoare

onlyrequiredtokeyintheirPPSNumberorCompanyTaxReferenceNumber.

Revenue Regions & District Ofces Address Telephone

Dublin Region

CityCentre(Dublincitypostalareas1&2) 9/15UpperOConnellStreet,Dublin1 01-8655000

SouthCity(DublinCitysouthoftheLiffeyexcludingpos talarea2) 85-93LowerMountStreet,Dubl in2 01-6474000

NorthCity (DublinCity northoftheLiffeyex cludingpostalarea1) 9/15Upper OConnell Street,Dublin1 01-8655000

SouthCounty(LocalAuthorityarea) PlazaComplex,BelgardRoad,Tallaght,Dublin24 01-6470700

Fingal(LocalAuthorityarea) BlockD,AshtownGate,NavanRoad,Dublin15 1890678456

DunLaoghaire/Rathdown(LocalAuthorityarea) LansdowneHouse,LansdowneRoad,Dublin4 01-6329400

CentralRevenueInformationOfce CathedralStreet,OffUpr.OConnellStreet,Dublin1 Personalcallersonly

TallaghtRevenueInformationOfce Level2,TheSquare,Tallaght,Dublin24 Personalcallersonly

Dublin Regional PAYE LoCall Number for Employees 1890 333 425

South West Region

CorkEastincludingCorkCountyEast,CityNorth&CityCentre GovernmentOfces,SullivansQuay,Cork 021-4325000

CorkSouthWestincludingCorkCountySouthWest,

CitySouth&CityEast GovernmentOfces,SullivansQuay,Cork 021-4325000

CorkNorthWestincludingCorkCountyNorthWest&CityWest GovernmentOfces,SullivansQuay,Cork 021-4325000

Limerick RiverHouse,CharlottesQuay,Limerick 061-212700

Clare GovernmentOfces,KilrushRoad,Ennis,Co.Clare 065-6849000

Kerry GovernmentOfces,SpaRoad,Tralee,Co.Kerry 066-7161000

South West Regional PAYE LoCall Number for Employees 1890 222 425

Border Midlands West Region

GalwayCounty HibernianHouse,EyreSquare,Galway 091-536000

Galway/Roscommon(GalwayCityandCo.Roscommon) HibernianHouse,EyreSquare,Galway 091-536000

Mayo MichaelDavittHouse,Castlebar,Co.Mayo 094-9037000

Sligo(includingCountiesSligo,LeitrimandLongford) GovernmentOfces,CranmoreRoad,Sligo 071-9148600

Donegal GovernmentOfces,HighRoad,Letterkenny,Co.Donegal 074-9169400

Westmeath/Offaly GovernmentOfces,PearseStreet,Athlone,Co.Westmeath 090-6421800

Louth Gov.Ofces,MillenniumCentre,Dundalk,Co.Louth 042-9353700

Cavan/Monaghan Gov.Ofces,MillenniumCentre,Dundalk,Co.Louth 042-9353700

Border Midlands West Regional PAYE LoCall Number for Employees 1890 777 425

East South East Region

Tipperary(excludingClonmelarea) GovernmentOfces,Stradavoher,Thurles,Co.Tipperary 0504-59500

Kilkenny(includingCountiesCarlowandLaoisbutexcluding

Revenue CGT Guide Oct2010

Documents

Transcript of Revenue CGT Guide Oct2010