Capital Gains Tax (CGT) Mailshot FAQs
Q1. I sold a property that I resided in as my principal private residence (PPR), do I have a liability and what should I do about your letter?
Normally gains on PPR disposals/sales (house and a garden or grounds of up to one acre), are exempt and hence you will not have a liability to capital gains tax (CGT), however, you should still make a return of the disposal/sale and claim principal private residence relief at the same time – see Q2 below.
Q2. How do I make a return and claim appropriate principal private residence relief?
If you are a self assessed taxpayer, you should both return the disposal/sale and claim appropriate PPR relief on statutory return 
Form 11 (PDF, 682 KB) due for submission by 31/10/11.
Other taxpayers can return the disposal/sale and claim appropriate PPR relief on statutory return Form CG 1(PDF, 286 KB) due for submission by 31/10/11.
Q3. How do I know if the sale relates to a PPR?
Gains made on the disposal of your home together with its gardens or grounds up to an area (exclusive of the site of the residence) of one acre may be exempt. For full relief to apply, you must have occupied the home as your principal private residence throughout your period of ownership or to within 12 months of the date of disposal. Relief may be restricted where the home was not your main residence throughout the period of ownership (other than the final 12 months), where any part of it was used exclusively for the purposes of a trade, business or profession or where it is sold as development land, for example part of the garden.
Additional information on this is available in our CGT Booklet – Guide to Capital Gains Tax, chapter 5 refers (PDF, 217KB).
Q4. I think I have a liability to CGT for 2008, what form do I use to facilitate making a payment?
You should download from the Revenue website www.revenue.ie a CGT payslip and submit it together with the appropriate CGT return (mentioned above) and your payment in settlement.
Q5. I sold land, roughly 1/4 of an acre, from the back garden of my PPR to a builder for development purposes. Do I have a liability?
Yes, in all likelihood you will have a liability. As stated at Q 3 above, normally any gain on such a disposal is exempt from CGT. However, where a dwelling house or garden/part of a garden, is sold for greater than its current use value [1] , then this constitutes the sale of development land and principal private residence relief will apply only to the current use value. In general terms the difference between the consideration and the current use value is liable to capital gains tax. Development Land rules do not apply to disposals where the total consideration from such disposals does not exceed €19,050.
[1] Current use value in relation to land means the amount which would be the market value of the land at that time if the market value were calculated on the assumption that it was at that time and would remain unlawful to carry out any development in relation to the land other than development of a minor nature
Q6. Do I have to pay CGT if I dispose of an investment property?
You will be liable to CGT on any gain you make. (In the first place, you should note that 'disposal' includes not alone an outright sale but also a gift – see Q7 below). The gain you make (ignoring indexation and purchase and sale costs) is simply the difference between the purchase price and the sale price.
Q7. If I make a gift of property do I have to pay capital gains tax?
Yes, gifts of property are liable to CGT in a like manner to any other disposal of property. (A gift of a PPR or of an investment property is taxed in the same manner as a sale at arms length of either such property). In any computation of the gain/loss arising on such a disposal, the proceeds figure is substituted by the market value of the property (disposed of) at the date of the gift and CGT is then calculated in the normal manner.
So, for example, where a parent gifts a property to a child for free, or for a sum less than the property’s market value the parent is deemed to have received the market value of the property for the purposes of calculating any CGT due.
Q8. I sold a property in my capacity as executor of a will, do I have a liability?
You may have a liability. Where assets pass on death there is no charge to CGT. Hence, any liability arising is restricted to CGT calculated by reference to the difference between the disposal proceeds and the market value of the property at date of death.
Q9. I inherited a property and subsequently sold it, do I have a liability?
Again any liability is restricted to CGT calculated by reference to the difference between the disposal proceeds and the market value of the property at date of death.
Q10. I transferred an asset owned by me to my spouse, is there CGT on transfers between spouses?
No, when the asset is transferred it is treated as if no gain/no loss occurred on the transfer; the benefiting spouse inherits the base cost and period of ownership from the spouse making the disposal. In the event that the benefiting spouse subsequently disposes of the asset the original base cost and period of ownership is used to calculate any gain arising. (Transfers between spouses are taxable, if the benefiting spouse is non-resident in the year the transfer takes place.)
Q11. I was party to the sale of the PPR of my separated spouse. We separated a number of years ago and I left the family home at that time. The sale did not form part of any legal agreement governing the separation. Do I have a liability?
Yes, you would be liable on your portion of the sale proceeds subject to the appropriate PPR relief in respect of your periods of residence.
Q12. I transferred my interest in what was the family home to my separated spouse for a consideration equal to market value under the terms of a legal deed of separation. Do I have a liability?
No, transfers between spouses under the terms of a legal agreement governing the separation are not liable. However, transfers between spouses are taxable if the benefiting spouse is non-resident in the year the transfer takes place
Q13. I made a loss when I transferred my interest in what was the family home to my separated spouse for a consideration at less than market value. We separated a number of years ago and I left the family home at that time, while my separated spouse remained in situ. The sale did not form part of any legal agreement governing the separation. Do I have a liability and or can I claim loss relief?
You may have a liability to CGT based on the market value of the property transferred, (at date of transfer) as opposed to actual transfer proceeds, subject to the appropriate PPR relief in respect of your periods of residence. If there is any question of a loss arising, it would be calculated on the market value transfer rather than the actual reduced consideration involved.
Any other disposals from one spouse to the other which takes place after the year of separation or outside of a divorce/court order are treated as disposals at full market value as if between strangers, and Capital Gains Tax is calculated in the normal way.