Capital Gains Tax

Overview There are provisions designed to address capital gains tax avoidance in relation to non-resident trusts and companies resident abroad and two complementary provisions that attribute the capital gains of non-resident trusts to resident beneficiaries. The gains of offshore trusts may be attributed to the settlor (creates the trust) and/ or resident beneficiaries. If the settlor of a non-resident trust has an interest in the […]

Lease Possibilities There are special rules for capital gains tax rules on leases. The rules reflect the range of transactions that may be effected by a lease. It is possible to have a term ranging from a very short period to something approximating to an outright sale. The rent may range from a nominal rent to a full market value rent and any corresponding premium […]

Assets for CGT Assets for capital gain tax purposes cover anything capable of being owned.  This is wider than property in the ordinary sense of the word.  It would include land, buildings, movable property, shares together with a host of intangible type assets.  It covers anything capable of being owned or sold. The essence of the capital gain is that that which is owned is […]

Special Rules Development land has always been subject to special capital gains tax rules.  The rules are more restrictive than in the case of other assets. The thinking behind this approach is that development windfalls are linked to the decisions of private authorities rather than intrinsic improvement of the land. Development Land Development land is any land whose price does not reflect its current use […]

Price less Cost Broadly speaking, a capital gain is the difference between the sale price and acquisition cost of a capital asset. Usually, the price received for the sale of the assets is the sum used in calculating the gain. However where the sale is other than at market value, or where the transaction is between connected person, the market value is substituted for the […]

Residence An individual who is resident in Ireland is liable to capital gains tax on all of his gains worldwide.  He may also be liable in another country or jurisdiction in which event a double taxation or a unilateral credit may be available for tax paid in that other country. The rules for residence are the same as in income tax.  The so called split […]

CGT v Income Tax Capital gains tax is charged on the profit on the disposal of capital assets. It taxes the rise in value of the asset between the date of acquisition and the disposal. Capital gains tax is the complimentary tax to income tax. Capital gains tax applies to disposals which are not subject to income tax. What may be a capital gain in […]

Overview All disposals of assets in the year of assessment are aggregated. The year of assessment is the calendar year. Transactions are not assessed individually. Gains are netted against losses in the year. The return must be made by 31st October in their year following the year of disposal. (as with income tax, even if a person is not liable to income tax, they must […]

Reporting Where a resident individual creates a trust in another jurisdiction, there is an obligation on that person creating the trust to notify Revenue within three month. The person creating the settlements must make the return if the trustees are not resident. There are similar obligations on certain advisors who are involved in the making of the settlement.  Reporting obligations in respect of tax avoidance […]

Types of Trust Tax rules make persons such as trustees, nominee holders of securities, personal representatives and others in similar positions, personally responsible for capital gains tax in relation to the trust assets. There are similar responsibilities for income tax. The liability may be satisfied from the trust fund or equivalent. They may incur personal liability where they distribute funds without making provision for the […]