Capital Gains Tax (CGT) is a tax on the sale, gift or exchange of an asset.
If you sold, gifted or transferred an asset between 1 January and 30 November 2020, or received capital payments from such assets, the deadline for payment of any Capital Gains Tax due is next Tuesday 15 December 2020.
For disposals between 1 December and 31 December 2020, the payment deadline is 31 January 2021.
What is CGT and who pays it?
CGT is a tax you pay on any capital gain (profit) made when you dispose of an asset. It is the profit/chargeable gain that is taxed, not the whole amount you receive. CGT is payable by the person making the disposal. These arrangements apply to all taxpayers, including PAYE and self-employed.
What is considered an asset?
You must pay Capital Gains Tax on gains made from the sale, gift or exchange of an asset such as:
- land (including development land)
- buildings (houses, apartments, or commercial property)
- shares in companies (Irish-resident or non-resident)
- assets that have no physical form such as goodwill, patents and copyright
- currency (other than Irish currency)
- assets of a trade
- foreign life insurance policies and offshore funds
- capital payments (in certain situations)
- Antiques, paintings and jewellery.
Rate of Capital Gains Tax
The rate of CGT is 33% for most gains. There are other rates for specific types of gains. These rates are:
- 40% for gains from foreign life policies and foreign investment products
- 15% for gains from venture capital funds for individuals and partnerships ( if youare an individual)
- 12.5% for gains from venture capital funds for companies.
Calculating Capital Gains Tax
Take your taxable gain and deduct any personal exemptions or reliefs due and allowable losses if appropriate. Multiply this figure by the rate of CGT.
Expenses that you can deduct from the sale price to work out your chargeable gain. These can be:
- any money spent by you which adds value to the asset
- costs (for example, fees paid by you to a solicitor or auctioneer) when you acquired and disposed of the asset.
Further reading: Revenue.ie Capital Gains Tax on the Sale, Gift or Exchange of an Asset.
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