Introduction to Capital Gains Tax

Question 1

what is the rate of capital gains tax

Answer 1

33%

Question 2

when was cgt introduce

Answer 2

1974/75

Question 3

define disposal of an asset

Answer 3

transfer of ownership from one person to another

Question 4

examples of assets

Answer 4

shares
buildings
land
paintings

Question 5

define a chargable gain

Answer 5

consideration (ie selling price)

market value of the asset in the case of a gift/ transfer to connected person

Question 6

example of part disposal

Answer 6

selling half of your acres of land

selling one apartment out of a block

Question 7

in what year was tax year changed to calendar basis

Answer 7

2001

Question 8

what was the short tax year

Answer 8

6/4/01-31/12/01

Question 9

how to compute gain

Answer 9

sales proceeds - cost

Question 10

when do we use market value for computation

Answer 10

when asset was gifted/inherited

transferring assets between connected people

acquired before 6 April 74

Question 11

examples of connected people

Answer 11

relatives
relatives of spouses
business partners

Question 12

what can be used to reduce gain

Answer 12

incidental costs
enhancement costs

Question 13

examples of incidental costs

Answer 13

legal fees

Question 14

example of enhanced expenditure

Answer 14

extension to house

Question 15

define enhancement expenditure

Answer 15

increases the value of the asset and is reflected in the value of the asset at the date of disposal

Question 16

are grants received allowable deduction

Answer 16

yes

Question 17

is interest paid on acquisition allowable deductions

Answer 17

no

Question 18

up to what date is indexation incurred

Answer 18

1 Jan 2003

Question 19

what is indexation

Answer 19

allows for inflation from the date expenditure is incurred to the date of disposal

Question 20

should CGT be calculated for each asset or for total value of all assets

Answer 20

for each asset

Question 21

what do the columns in the index tables represent

Answer 21

tax year the asset was disposed

Question 22

what do the rows in the index tables represent

Answer 22

tax year asset was acquired or expenditure incurred

Question 23

what are the restrictions on the use of indexation

Answer 23

cannot increase a loss

cannot convert a gain into a loss -> no gain no loss

Question 24

where the indexation increases a loss, what should happen

Answer 24

use actual loss (lower of the two)

ie the person cannot benefit from extra losses

Question 25

where the indexation turns a gain into a loss, what should happen

Answer 25

no gain no loss

Question 26

where the indexation increases a gain what happens

Answer 26

use actual gain (lower of the two)

Question 27

how much is the annual exemption

Answer 27

€1270

Question 28

is annual exemption taken before or after cgt calculated

Answer 28

before then cgt is calculated on the balance

Question 29

what gains can be taxed on residents and ordinary residents, domiciled to the state

Answer 29

worldwide gain

Question 30

what gains can be taxed on residents and ordinary residents, NOT domiciled to the state

Answer 30

irish gains and remittances

Question 31

what gains can be taxed on NON residents and NON ordinary residents, domiciled to the state or not

Answer 31

irish specified assets

Question 32

examples of irish specified assets

Answer 32

irish shares land and buildings in the state assets in the state used for the purpose of trade carried out inireland

Question 33

what is a remittance to ireland

Answer 33

transfer of the sale proceeds to ireland from the country in which the asset was solf

Question 34

if only part is remitted to ireland, how much is taxable

Answer 34

only the part remitted

Question 35

is there relief available on foreign losses from disposal

Answer 35

no

Question 36

can losses gain be used to reduce gain before or after annual exemption?

Answer 36

before

Question 37

where can extra loss go

Answer 37

be carried over into the next year and carried forward indefinitely

Question 38

where can loss go the year of death

Answer 38

be used to set against gains in three previous yeats

Question 39

what happens to losses related to a connected person

Answer 39

can only be used to set against gain on disposal to same connected person

Question 40

date of disposal in case of a contract

Answer 40

date contract is signed regardless of when money changes hands unless conditional contract eg when planning permission obtained

Question 41

date of disposal for gifts

Answer 41

date of gift

Question 42

date of disposal for inheritance

Answer 42

date of death

Question 43

initial period for cgt gain

Answer 43

1 Jan to 30 Nov inclusive

Question 44

when does CGT for initial period have to be paid

Answer 44

15 december in the same year

Question 45

what is the later period for cgt gains

Answer 45

1 december to 31 december

Question 46

when does cgt for later period have to be paid

Answer 46

31 jan following year

Question 47

when does cgt return have to be filed by

Answer 47

31 october following year

Question 48

what are repercussions for not paying tax on time

Answer 48

interest

Question 49

what is repercussion for not filing on time

Answer 49

surcharge

Question 50

gains exempt from cgt

Answer 50

woodlands work of art previously loaned to approved museum government securities winnings from lottery pension lump sums

Question 51

exempt persons and bodies

Answer 51

pension funds charities local authorities HSE

Question 52

do married couples living together get charged CGT on gifts they give each other/inheritance left for each other

Answer 52

no

Question 53

if spouses must transfer assets by way of deed of separation court charge, is cgt charged

Answer 53

no

Question 54

if couples transfer assets on their own behalf after separation, is cgt charged

Answer 54

yes

Question 55

are annual exemptions transferable between spouses

Answer 55

no

Question 56

are gains and losses transferable between spouses

Answer 56

yes

Question 57

formula for original acquisition cost for part disposal

Answer 57

original cost of asset x (a/(a+b)) a = market value of part solds b = market value of part retained

Question 58

how to apportion enhancement expenditure for part disposal

Answer 58

enhancement cost x a/a+b

Question 59

what is a wasting asset

Answer 59

an asset with a predictable usefullife < 50 years

Question 60

how to calculate cost on wasting asset

Answer 60

cost x years left/50