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39 1997

TAXES CONSOLIDATION ACT, 1997

CHAPTER 3

Capital gains tax

Collection of capital gains tax.

[CGTA75 s51(1) and Sch4 Pars1(3), 2(1) and 2(2)]

976. —(1) The Collector-General for the time being appointed under section 851 shall collect and levy capital gains tax from time to time charged in all assessments made under the Capital Gains Tax Acts of which particulars have been transmitted to him or her under section 928 (1) as applied to capital gains tax by section 931 , and the provisions of section 851 relating to the nomination by the Revenue Commissioners of persons to act as the Collector-General or to exercise the powers of the Collector-General shall apply to capital gains tax as they apply to income tax.

(2) The provisions of the Income Tax Acts relating to the collection and recovery of income tax shall, subject to any necessary modifications, apply in relation to capital gains tax as they apply in relation to income tax chargeable under Schedule D.

(3) In particular and without prejudice to the generality of subsection (2), Chapter 1 of this Part (other than sections 960 and 972 ) shall, subject to any necessary modifications, apply to capital gains tax.

Recovery of capital gains tax from shareholder.

[CGTA75 s51(1) and Sch4 par17]

977. —(1) In this section, “capital distribution” has the same meaning as in section 583 .

(2) This section shall apply where a person (in this section referred to as “the beneficiary”) connected with a company resident in the State receives or becomes entitled to receive in respect of shares in the company any capital distribution from the company, other than a capital distribution representing a reduction of capital, and—

(a) the capital so distributed derives from the disposal of assets in respect of which a chargeable gain accrues to the company, or

(b) the distribution constitutes such a disposal of assets.

(3) Where—

(a) the capital gains tax assessed on the company for the year of assessment in which the chargeable gain referred to in subsection (2) accrues includes any amount in respect of that chargeable gain, and

(b) any of the capital gains tax assessed on the company for that year is not paid within 6 months from the date when it becomes payable by the company,

the beneficiary may by an assessment made within 2 years from that date be assessed and charged (in the name of the company) to an amount of that capital gains tax—

(i) not exceeding the amount or value of the capital distribution which the beneficiary has received or became entitled to receive, and

(ii) not exceeding a proportion equal to the beneficiary's share of the capital distribution made by the company of capital gains tax on the amount of that gain at the rate in force when the gain accrued.

(4) A beneficiary paying any amount of tax under this section shall be entitled to recover a sum equal to that amount from the company.

(5) This section is without prejudice to any liability of the beneficiary receiving or becoming entitled to receive the capital distribution in respect of a chargeable gain accruing to that beneficiary by reference to the capital distribution as constituting a disposal of an interest in shares in the company.

Gifts: recovery of capital gains tax from donee.

[CGTA75 s51(1) and Sch4 par18]

978. —(1) In this section—

old asset” and “new asset” have the same meanings respectively as in section 597 ;

references to a donor include, in the case of an individual who has died, references to his or her personal representatives;

references to a gift include references to any transaction otherwise than by means of a bargain made at arm's length in so far as money or money's worth passes under the transaction without full consideration in money or money's worth, and “donor” and “donee” shall be construed accordingly.

(2) Where—

(a) a chargeable gain accrues in any year of assessment to any person on the disposal of an asset by means of a gift, and

(b) any amount of capital gains tax assessed on that person for that year of assessment is not paid within 12 months from the date when the tax becomes payable,

the donee may by an assessment made not later than 2 years from the date when the tax became payable be assessed and charged (in the name of the donor) to capital gains tax on an amount—

(i) not exceeding the amount of the chargeable gain so accruing, and

(ii) not exceeding such an amount of chargeable gains as would, if charged at the rate provided in section 28 (3), result in liability to an amount of capital gains tax equal to that amount of capital gains tax which was not paid by the donor.

(3) Where the gift consists of a new asset, the donee may, in addition to being assessed and charged under subsection (2) in respect of the new asset, be assessed and charged as if the chargeable gain on the disposal of the old asset were a chargeable gain on the disposal of the new asset the capital gains tax in respect of which was not paid within 12 months from the date when the tax had become payable.

(4) (a) Where a person on whom capital gains tax is assessed and charged in respect of the disposal of an asset transfers directly or indirectly by means of a gift to a donee—

(i) the whole of the proceeds of the disposal, or

(ii) in a case where the asset is a new asset acquired by the use of the proceeds of the disposal of an old asset, the whole of the proceeds of the disposal of the new asset,

subsections (2) and (3) shall apply to the amount of capital gains tax so assessed and charged.

(b) Where a person on whom capital gains tax is assessed and charged in respect of the disposal of an asset transfers directly or indirectly by means of a gift to a donee—

(i) part of the proceeds of the disposal, or

(ii) in a case where the asset is a new asset acquired by the use of the proceeds of the disposal of an old asset, part of the proceeds of the disposal of the new asset,

subsections (2) and (3) shall apply to such part of the amount of capital gains tax so assessed and charged as bears to the whole of such tax the same proportion that that part of the proceeds bears to the whole of those proceeds.

(5) The donee of a gift paying any amount of tax in pursuance of this section shall, subject to any terms or conditions of the gift, be entitled to recover a sum of that amount from the donor of the gift as a simple contract debt in any court of competent jurisdiction.

(6) This section shall apply in relation to a gift made to 2 or more donees with any necessary modifications and subject to the condition that each such donee shall be liable to be assessed and charged in respect only of such part of the amount of capital gains tax payable by the donees by virtue of this section as bears to the whole of such tax the same proportion as the part of the gift made to that donee bears to the whole of the gift.

Time for payment of capital gains tax assessed under sections 977 (3) or 978 (2) and (3).

[CGTA75 s5(2); FA88 s13(7) (c); FA91 s48]

979. —Capital gains tax assessed on any person under section 977 (3) or subsections (2) and (3) of section 978 in respect of gains accruing in any year shall be payable by that person at or before the expiration of 3 months following that year, or at the expiration of a period of 2 months beginning with the date of the making of the assessment, whichever is the later.

Deduction from consideration on disposal of certain assets.

[CGTA75 s51(1) and Sch4 par11(1) to (10A); FA89 s29; FA95 s76; FA96 s59]

980. —(1) In this section—

designated area” means an area designated by order under section 2 of the Continental Shelf Act, 1968 ;

exploration or exploitation rights” has the same meaning as in section 13 ;

shares” includes stock and any security.

(2) This section shall apply to assets that are—

(a) land in the State,

(b) minerals in the State or any rights, interests or other assets in relation to mining or minerals or the searching for minerals,

(c) exploration or exploitation rights in a designated area,

(d) shares in a company deriving their value or the greater part of their value directly or indirectly from assets specified in paragraph (a), (b) or (c), other than shares quoted on a stock exchange,

(e) shares, other than shares quoted on a stock exchange, to which section 584 applies, whether by virtue of that section or any other section, so that, as respects a person disposing of those shares, they are treated as the same shares as shares specified in paragraph (d), acquired as the shares so specified were acquired, and

(f) goodwill of a trade carried on in the State.

(3) This section shall not apply where the amount or value of the consideration in money or money's worth on a disposal does not exceed the sum of £100,000; but if an asset owned at one time by one person, being an asset to which this section would but for this subsection apply, is disposed of by that person in parts—

(a) to the same person, or

(b) to persons who are acting in concert or who are connected persons,

whether on the same or different occasions, the several disposals shall for the purposes of this subsection, but not for any other purpose, be treated as a single disposal.

(4) (a) Subject to paragraph (b), on payment of the consideration for acquiring an asset to which this section applies—

(i) the person by or through whom any such payment is made shall deduct from that payment a sum representing an amount of capital gains tax equal to 15 per cent of that payment,

(ii) the person to whom the payment is made shall allow such deduction on receipt of the residue of the payment, and

(iii) the person making the deduction shall, on proof of payment to the Revenue Commissioners of the amount so deducted, be acquitted and discharged of so much money as is represented by the deduction as if that sum had been actually paid to the person making the disposal.

(b) Where the person disposing of the asset produces to the person acquiring the asset a certificate issued under subsection (8) in relation to the disposal, no deduction referred to in paragraph (a) shall be made.

(5) Where any payment referred to in subsection (4) (a) is made by or on behalf of any person, that person shall forthwith deliver to the Revenue Commissioners an account of the payment and of the amount deducted from the payment, and the inspector shall, notwithstanding any other provision of the Capital Gains Tax Acts, assess and charge that person to capital gains tax for the year of assessment in which the payment was made on the amount of the payment at the rate of 15 per cent.

(6) Where, in relation to any payment referred to in subsection (4) (a), any person has made default in delivering an account required by this section, or where the inspector is not satisfied with the account, the inspector may estimate the amount of the payment to the best of his or her judgment and, notwithstanding section 31 , may assess and charge that person to capital gains tax for the year of assessment in which the payment was made on the amount so estimated at the rate of 15 per cent.

(7) Where the amount of capital gains tax assessed and charged under subsection (5) or (6) is paid, appropriate relief shall, on a claim being made in that behalf, be given to the person chargeable in respect of the gain on the disposal, whether by discharge or repayment or otherwise.

(8) A person chargeable to capital gains tax on the disposal of an asset to which this section applies may apply to the inspector for a certificate that tax should not be deducted from the consideration for the disposal of the asset and that the person acquiring the asset should not be required to give notice to the Revenue Commissioners in accordance with subsection (9) (a), and, if the inspector is satisfied that the person making the application is the person making the disposal and that—

(a) that person is resident in the State,

(b) no amount of capital gains tax is payable in respect of the disposal, or

(c) the capital gains tax chargeable for the year of assessment for which that person is chargeable in respect of the disposal of the asset and the tax chargeable on any gain accruing in any earlier year of assessment (not being a year ending earlier than the 6th day of April, 1974) on a previous disposal of the asset has been paid,

the inspector shall issue the certificate to the person making the application and shall issue a copy of the certificate to the person acquiring the asset.

(9) (a) Where—

(i) after the 2nd day of June, 1995, a person acquires an asset to which this section applies and section 978 does not apply,

(ii) the consideration for acquiring the asset is of such a kind that the deduction mentioned in subsection (4) cannot be made out of the consideration, and

(iii) the person disposing of the asset does not, at or before the time at which the acquisition is made, produce to the person acquiring the asset a certificate under subsection (8) in relation to the disposal, the person acquiring the asset shall within 7 days of the time at which the acquisition is made—

(I) notify the Revenue Commissioners of the acquisition in a notice in writing containing particulars of—

(A) the asset acquired,

(B) the consideration for acquiring the asset,

(C) the market value of that consideration estimated to the best of that person's knowledge and belief, and

(D) the name and address of the person making the disposal,

and

(II) pay to the Collector-General an amount of capital gains tax equal to 15 per cent of the market value of the consideration so estimated.

(b) Capital gains tax which by virtue of paragraph (a) (II) is payable by a person acquiring an asset shall—

(i) be payable by that person in addition to any capital gains tax which by virtue of any other provision of the Capital Gains Tax Acts is payable by that person,

(ii) be due within 7 days of the time at which that person acquires the asset, and

(iii) be payable by that person without the making of an assessment;

but tax which has become so due may be assessed on the person acquiring the asset (whether or not it has been paid when the assessment is made) if that tax or any part of that tax is not paid on or before the due date.

(c) Where any person acquiring an asset has in pursuance of paragraph (a) (II) paid any amount of capital gains tax by reference to the market value of the consideration for acquiring the asset, that person shall be entitled to recover a sum of that amount from the person disposing of the asset as a simple contract debt in any court of competent jurisdiction; but where a copy of a certificate under subsection (8) is issued to the person acquiring the asset, being a copy of a certificate in relation to the disposal by which the person acquired the asset, that person—

(i) shall not be entitled thereafter to so recover that sum, and

(ii) shall be repaid that amount of tax.

(d) This section shall apply in relation to the acquisition of an asset by 2 or more persons with any necessary modifications and subject to the condition that each such person shall be liable to be assessed and charged in respect only of such part of the amount of capital gains tax payable by those persons by virtue of paragraph (b) as bears to the whole of such tax the same proportion as the part of the asset acquired by that person bears to the whole of the asset.

(10) Notwithstanding sections 979 and 1042 , where an amount of capital gains tax is assessed and charged pursuant to this section, such amount shall be due and payable on the day after the day on which the assessment is made.

(11) (a) Subject to paragraph (b), where there is a disposal of assets by virtue of a capital sum being derived from those assets, the person paying the capital sum shall, notwithstanding that no asset is acquired by that person, be treated for the purposes of this section as acquiring the assets disposed of for a consideration equal to the capital sum, whether that sum is paid in money or money's worth, and this section shall, subject to any necessary modifications, apply accordingly.

(b) Paragraph (a) shall not apply where there is a disposal of an asset by virtue of a capital sum being derived from the asset under a policy of insurance of the risk of any kind of damage to the asset.

Payment by instalments where consideration due after time of disposal.

[CGTA75 s44(1)]

981. —Where the consideration or part of the consideration taken into account in the computation of a chargeable gain is payable by instalments over a period beginning not earlier than the time when the disposal is made, being a period exceeding 18 months, then, if the person making the disposal satisfies the Revenue Commissioners that such person would otherwise suffer undue hardship, the capital gains tax on such a chargeable gain accruing on a disposal may, at such person's option, be paid by such instalments as the Revenue Commissioners may allow over a period not exceeding 5 years and ending not later than the time at which the last of the first-mentioned instalments is payable.

Preferential payment.

[CGTA75 s51(1) and Sch4 par15]

982. —The priority attaching to assessed taxes under section 81 of the Bankruptcy Act, 1988 , and sections 98 and 285 of the Companies Act, 1963 , shall apply to capital gains tax.