Capital taxes can apply to the disposal or transfer of assets. There is significant potential for tax savings with respect to capital taxes, which can arise as a result of retirement, succession planning, estate planning, corporate restructuring and other wealth management events.
Our tax professionals provide expert advice and guidance on taxation planning options and integrate these with your overall strategy. Our team works closely with our business advisors in our advisory department, to ensure a seamless taxation and financial solution for all your business affairs.
Capital gains tax
Capital Gains Tax (CGT) is chargeable on gains arising on the disposal of assets. Any form of property, (other than Irish currency) including an interest in property, is an asset for CGT purposes.
The standard rate of Capital Gains Tax is 33% for disposals made on or after 5 December 2012.
Gains or profit on the disposal of some assets are specifically exempted from CGT, these include:
• Gains on the disposal of property owned by you (house or apartment) which was occupied by you, or by a dependent relative, as a sole or main residence. Restrictions may apply where the property was not fully occupied as a main residence throughout the period of ownership or, where the sale price reflects development value.
• Gains from betting, lotteries, sweepstakes, bonuses payable under the National Instalments Savings Scheme and Prize Bond winnings
• Gains on Government Loans and Debenture issued by certain Semi-state bodies
• Gains on disposal of wasting chattels; that is movable goods e.g. animals and private motor cars
• Gains on life assurance policies (unless purchased from another person or taken out with certain foreign insurers on or after 20 May 1993)
• Gains made by individuals on tangible moveable property worth €2,540 or less at the time of disposal
In Budget 2012, a incentive relief from CGT was introduced for the first 7 years of ownership for properties bought between 7 December 2011 and the end of 2014, where the property is held for more than 7 years. The relief applies to all property, whether residential or non-residential. Other exemptions include:
• Retirement relief
• Transfer of a site from a parent to a child
Capital acquisitions tax
Capital Acquisitions Tax comprises Gift Tax, Inheritance Tax and Discretionary Trust Tax. Gift tax is charged on taxable gifts taken (other than on a death) and, Inheritance Tax is charged on taxable inheritances taken (on a death.) A once-off Inheritance Tax applies to property subject to a discretionary trust on 25 January, 1984, or becoming subject to a discretionary trust on or after that date.
Gifts and inheritances can be received tax-free up to a certain amount. The tax-free amount, or threshold, varies depending on your relationship to the person giving the benefit. There are three different categories or groups. Each has a threshold that applies to the total benefits you have received in that category since 5 December 1991.
Current CAT thresholds (from 9th October 2019.)
• Group A: €335,000. This applies where the beneficiary is a child (including adopted child, step-child and certain foster children) or minor child of a deceased child of the disponer. Parents also fall within this threshold where they take an inheritance of an absolute interest from a child
• Group B: €32,500. This applies where the beneficiary is a brother, sister, niece, nephew or lineal ancestor or lineal descendant of the disponer
• Group C: €16,250. This applies in all other cases
• Capital Acquisitions Tax is charged at 33% on gifts or inheritances made on or after 5 December 2012 (the rate was formerly 30%). This only applies to amounts over the group threshold
Other reliefs include:
• Business relief
• Agricultural relief
• Offset of CGT paid on the same transaction against CAT