Capital Gains Tax
Capital Gains Tax (CGT) can affect all types of taxpayers including private individuals, companies, trusts and estates. At its simplest, CGT is payable on any gain you make on the disposal of a capital asset, for example, property or shares.
A liability to CGT can also be triggered on transactions which one might expect to be outside the reach of the tax.
There is an extensive amount of legislation on CGT, including many reliefs, exemptions and anti-avoidance provisions. It follows that a thorough knowledge of the tax is required to be in a position to give expert advice on the CGT consequences of any transaction.
Below are only some of the many areas in CGT where we can be of assistance.
topProperty Transactions
As a basic rule, a profit made on the sale of land and/or buildings will be liable to CGT. We can advise you on any property transaction, including:
- The sale of a home or principle residence (or that of a dependent relative).
- The taxation of gains on the sale of land with development potential.
- Tax implications of making a number of similar type disposals.
- The CGT implications of transferring a site to a child.
topShare Transactions
With the increasing participation of private individual investors in the stock market, along with
transactions in the shares of owner-managed companies and corporate groups, Capital Gains Tax on the
disposal of shares is of great importance.
In addition, dealings in securities such as options, convertibles, rights and bonus issues can all
have CGT implications.
Many of the reliefs from CGT discussed further on this page pertain to transactions in shares. In addition to all of these, we can advise you on other issues relating to the disposal of shares including:
- Anti-avoidance measures regarding transactions in shares and other securities.
- The effect of residence and domicile status on a CGT liability from the sale of shares.
- CGT on the disposal of shares under employer share schemes.
topTransfer of a Business to a Company
As a business grows, it may be advantageous for a number of reasons to operate as a company rather than as a sole trader or partnership. However, there are many tax implications in formally transferring assets from your business to a company.
We can advise you on how to incorporate your business whilst minimising the amount of tax incurred.
topSelling/Transferring a Business
Selling or transferring a business is the same as disposing of any other asset and can have similar tax implications. In certain circumstances individuals may qualify for relief which can substantially reduce the amount of tax paid on disposing of a business.
In any case, expert tax advice should be sought if you are selling or transferring your business and we can be consulted to ensure that all taxes arising are kept to a minimum.
topLease Transactions
Granting or selling/assigning a lease can have CGT implications.
There are highly complicated computational rules in assessing CGT on lease transactions, however, we can assess any CGT which you may be liable for on any lease transaction you enter into.
In addition, we can also advise you on any VAT issues which may arise on commercial lease transactions (see the Property Transactions section of our VAT page).
topCompanies Capital Gains Tax
Companies are liable to CGT on disposals of assets in the same way as individuals are. A more favourable treatment can arise on transactions between companies in a corporate group.
We can provide expert advice on how CGT affects companies and transactions between connected companies. Among the many issues you can consult us on are:
- Transfers of trade, assets or stock between group companies.
- Transitioning an Irish branch to a formal Irish subsidiary and how best to achieve this.
- Effects of a company leaving a group or becoming non-resident.
topRe-organisations, Acquisitions & Mergers
There are possible tax implications with any business deal and corporate re-organisations, acquisitions or mergers are no different.
This is a speciality area of Brett & Co. and we can offer expert tax advice on any corporate re-organisation or deal you, your company or group are considering, such as:
- Share for Share (or Trade) deals.
- Bonus and Rights Issues.
- Reductions in Share Capital.
topCompany Distributions & CGT
We can advise any individual, company or body who are shareholders in a company, on the likely tax implications of any payment received from a company and where possible, any preparatory steps which can be taken to minimise their exposure to tax.
In particular, we can advise you on and help plan for:
- A company re-purchasing its own shares.
- Company Liquidations and the tax implications for shareholders.
- Bonus Issues of shares.
topTrusts & CGT
Trusts are liable to CGT on disposals of assets just as individuals and companies are. In addition, the person
establishing a trust (the "settlor") is potentially liable to CGT on setting up a trust.
Further complicated CGT provisions apply where Irish resident settlors establish non-resident trusts and when
trusts change from being Irish resident to non-Irish resident.
The taxation of trust gains is a very complex area, therefore the expert advice we provide can be essential when establishing or operating a trust. We can advise you on all tax issues in relation to trusts including:
- Appointing absolute and limited interests in assets to beneficiaries.
- The sale of a future interest in a trust asset.
- The consequences of CGT remaining unpaid.
- The accountable person for CGT arising on the gains of non-resident trusts.
- The impact of a trust ceasing to be Irish resident.
For information on how we can help you regarding the Income Tax issues of trusts, see the Estates & Trusts section of our Income Tax page.
For information on how we can help you regarding the Capital Acquisitions Tax issues of trusts, see the Trusts section of our Capital Acquisitions Tax page.