Capital Gains Tax is the tax charged on the profit made on the disposal of an asset. The difference between the price you paid for the asset and the price you sell it for is considered a taxable income.
CGT Assets
The most common asset disposals which attracts CGT are
- Land
- Buildings
- Shares
The sale of your Principal Private Residence is exempt from CGT.
Payment of CGT
The payment of CGT is split into 2 periods, the initial period and later period
- Initial Period –From 1 January to 30 November
- Later Period – From 1 December to 31 December
For disposals in the initial period CGT payments are due by 15 December in the same year. For disposals in the later period CGT payments are due by 31 January in the following year.
Capital Losses
You can offset a capital loss against a capital gain made in the same year or you can use it against a capital gain made by you in future years.
Calculating CGT
When calculating your CGT liability you are allowed to deduct the following
- The cost of purchasing the asset
- Enhancement expenditure to the asset
- Costs when you acquired/disposed the asset e.g solicitors fees, auctioneer fees
The first €1,270 of the gain is exempt from CGT. The current rate of CGT is 33%
Receiving a Gift
If you receive an asset as a gift you must pay CGT. You must use the market value of the asset on the date the asset was gifted to calculate the CGT liability.
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