Capital Gains Tax – Sale of Property & Shares

General Introduction

We provide information on the following:

The tax definition of ‘assets’ is very wide ranging and covers many different items. If you make a gain on the disposal of an asset you may have to pay Capital Gains Tax on the gain. The current rate of Capital Gains Tax is 33%.

This article explains how Capital Gains Tax can arise on the disposal of properties and shares and the rules applying in the calculation of the gain or loss on a sale of an asset. Our Capital Gains Tax calculators will do the calculations for you.

There are a number of special exemptions available from Capital Gains Tax which we also explain. One of the most important is the exemption from CGT on the sale of your principal private residence. We explain in detail how this relief works here.

Before you can be liable for Capital Gains Tax you must Sell or Dispose of an Asset. The meaning of these words is very important for understanding how you can be liable for Capital Gains Tax and are briefly explained as follows:

Sell
Takes its ordinary meaning and generally means selling an asset for an agreed sum of money or in exchange for something else.

Dispose
This has a wider meaning and includes giving assets away for no consideration e.g. gifts.

Assets
This covers a multitude of items and in respect of property includes options or contracts for property, which could be sold on without you ever acquiring the property involved.

Gains
You have to make a gain on the sale or deemed sale of an asset before you have to pay tax. There are special rules for determining whether or not a gain is made. We will explain these rules as regards the following situations:
The sale or gift of a property.
The sale of shares.
These are the most common areas where capital gains tax arises for most people.

Losses
If you make a loss on the sale of any asset that loss can be offset against any gain you have made in the same or future tax years on the sale/disposal of other assets. You need to report the loss to Revenue or else it could be disallowed.

The rules for calculating how a loss arises are much the same as for calculating if a gain arises with one major difference. When a loss arises you cannot create or increase your real loss by the relief for inflation, which applied up to 31 December 2002.

For married couples dealt with under joint assessment the losses of one spouse can be used to offset a gain of the other spouse.

Tax Credits & Reliefs (Intro)
Self Assessment Tax System (Intro)