...

Capital Gains Tax

Capital Gains Tax (CGT) in Ireland is a tax levied on the profit (gain) made from the sale or disposal of certain assets, such as property, shares, or other investments. The tax is applied to the difference between the sale price of an asset and its original purchase price, minus any allowable deductions or reliefs.

GET A QUOTE

Key Points about Capital Gains Tax in Ireland

Rate of Capital Gains Tax

    • The standard rate of Capital Gains Tax (CGT) in Ireland is 33% as of 2024.
    • This rate applies to the gain you make from selling or disposing of assets, after deducting allowable expenses, reliefs, and the annual exemption

Capital Gains Tax Rate Ireland

CGT applies when you dispose of an asset, which includes

  • Selling the asset.
  • Gifting the asset.
  • Exchanging the asset.
  • Transferring the asset to someone else, such as a family member or other person.

Disposals could involve any of the following:

  • Property: Selling real estate or land.
  • Shares: Selling stock or shares in companies.
  • Collectibles: Selling valuable items such as antiques, art, jewelry, or other collectibles.
  • Business assets: Selling assets used in the business, including goodwill, machinery, or shares in a company.

CGT Exemptions and Allowable Deductions

  • Annual Exemption: Individuals are allowed an annual exemption of €1,270 (for 2024). This means the first €1,270 of your gains in a tax year are not taxed.
  • Costs of Acquisition: You can deduct the cost of purchasing the asset, including associated costs such as legal fees, stamp duty, and auctioneer’s fees.
  • Costs of Sale: Costs associated with selling the asset, such as legal fees, agent’s fees, and advertising costs, can be deducted from the gain.
  • Improvement Costs: Any capital improvements made to the asset that increase its value can be deducted from the gain.

There are also specific reliefs available for certain types of assets

  • Principal Private Residence (PPR) Relief: If the asset is a property that has been your main home for the duration of ownership, you may qualify for full or partial exemption from CGT under Principal Private Residence Relief.
  • Entrepreneur Relief: This relief may reduce the CGT rate to 10% (rather than 33%) on the sale of certain business assets, subject to qualifying criteria.
  • Retirement Relief: Available for certain business owners aged 55 or over when selling or transferring business assets.

    When to Pay CGT in Ireland

      Payment Date: CGT is due on or before December 15th of the year in which the asset is disposed of. The exact due date depends on the date of the disposal. The process is as follows:

      • For disposals made between January 1 and November 30, CGT must be paid by December 15th of the same year.
      • For disposals made in December, CGT is due by January 31st of the following year.

      Filing the Return: You must file your CGT return and make the payment through the Revenue Online Service (ROS). This is done through the CGT1 Form.

        • The return must be filed by October 31st of the year following the disposal if you are filing on paper, or by November 30th if filing online through ROS.

      Example:

      If you sell an asset in 2024, and the sale is completed in any month from January to November 2024, CGT is due by December 15, 2024.

      If you sell the asset in December 2024, CGT is due by January 31, 2025.

      How to Pay CGT

      • Online via ROS: Payments are made through the Revenue Online Service (ROS) platform. You can pay via bank transfer, debit/credit card, or direct debit.
      • Payment Methods: CGT can be paid using the ROS payment facilities. You can also pay by cheque or postal order if filing the paper form, but online filing is encouraged for faster processing
      How to Avoid Capital Gains Tax on Property

      CGT for Non-Residents

      Even if you are not a resident of Ireland, you may still be liable for CGT on certain Irish assets. For example: If you sell Irish property (real estate) or shares in Irish companies, you may still be subject to CGT, regardless of where you reside.

      CGT and Inheritance or Gifts

      CGT does not generally apply to assets you inherit or receive as a gift. Instead, Capital Acquisitions Tax (CAT) applies to gifts and inheritances. However, if you sell or dispose of the inherited or gifted asset later, CGT may apply to any gain made from the sale, based on the value of the asset at the time you received it.

      Conclusion

      In Ireland, Capital Gains Tax applies when you make a profit from selling or disposing of an asset. The tax is levied at a rate of 33% on the gain, and there are certain exemptions, deductions, and reliefs available to reduce your liability. You must file and pay CGT by the appropriate due date to remain compliant with Irish tax laws

      Are you on the right Path?

      Free Business Check

      30 Minute Session

      Office Address

      Lassaboy, Boolteens, Co. Kerry, V93 DF20, Ireland.

      Phone

      +353 87 708 8006

      Email

      ger@fuchsiabell.ie

      Let us review your current financial situation and see if we can identify gaps that are holding you back from creating a more profitable company.