First Previous (PART III Inheritances And Settled Property) Next (PART V Special Reliefs)

20 1975

CAPITAL GAINS TAX ACT, 1975

PART IV

Exemptions and Reliefs

Gains of £500 and under.

16. —(1) An individual shall not be chargeable to capital gains tax for a year of assessment if the amount on which he is chargeable to capital gains tax under section 5 (1) for that year does not exceed £500.

(2) If the amount on which an individual is chargeable to capital gains tax under section 5 (1) for a year of assessment exceeds £500, only the excess of that amount over £500 shall be charged to capital gains tax for that year.

(3) In the case of an individual dying in the year of assessment, this section shall apply with the substitution for the reference to the individual of a reference to his personal representatives, and the amount of chargeable gains shall be that on which the personal representatives are chargeable in respect of gains accruing before death.

(4) Relief shall not be given under this section where an adjustment is allowed under section 6 (alternative charge by reference to income tax), or relief is allowed under section 26 (disposal of business or farm on retirement) or section 27 (disposal within the family of business or farm).

Chattels sold for £2,000 or less.

17. —(1) Subject to this section, a gain accruing on a disposal by an individual of an asset which is tangible movable property shall not be a chargeable gain if the amount or value of the consideration for the disposal does not exceed £2,000.

(2) (a) The amount of capital gains tax chargeable in respect of a gain accruing on a disposal falling within subsection (1) for a consideration the amount or value of which exceeds £2,000 shall not exceed half the difference between the amount of that consideration and £2,000.

(b) For the purposes of this subsection the capital gains tax chargeable in respect of the gain shall be the amount of tax which would not have been chargeable but for that gain.

(3) Subsections (1) and (2) shall not affect the amount of an allowable loss accruing on the disposal of an asset, but for the purposes of computing under this Act the amount of a loss accruing on the disposal by an individual of tangible movable property the consideration for the disposal shall, if less than £2,000, be deemed to be £2,000 and the losses which are allowable losses shall be restricted accordingly.

(4) If two or more assets which have formed part of a set of articles of any description all owned at one time by one person are disposed of by that person—

(a) to the same person, or

(b) to persons who are acting in concert or who are, in the terms of section 33, connected persons,

whether on the same or different occasions, the two or more transactions shall be treated as a single transaction disposing of a single asset, but with any necessary apportionments of the reductions in tax, and in allowable losses, under subsections (2) and (3); and this subsection shall also apply where the assets, or some of the assets, are disposed of on different occasions, and one of them falls after the 28th day of February, 1974, but before the 6th day of April, 1974, but not so as to make any gain accruing on a disposal before the 6th day of April, 1974, a chargeable gain.

(5) If the disposal is of a right or interest in or over tangible movable property—

(a) in the first instance subsections (1), (2) and (3) shall be applied in relation to the asset as a whole, taking the consideration as including, in addition to the consideration for the disposal (referred to in this subsection as the actual consideration), the market value of what remains undisposed of,

(b) where the sum of the actual consideration and that market value exceeds £2,000, the limitation on the amount of tax in subsection (2) shall be to half the difference between that sum and £2,000 multiplied by the fraction equal to the actual consideration divided by the said sum, and

(c) where that sum is less than £2,000, any loss shall be restricted under subsection (3) by deeming the consideration to be the actual consideration plus the said fraction of the difference between the said sum and £2,000.

(6) This section shall not apply—

(a) in relation to a disposal of commodities of any description by a person dealing on a terminal market or dealing with or through a person ordinarily engaged in dealing on a terminal market, or

(b) in relation to a disposal of currency of any description.

(7) In this section tangible movable property shall not include a wasting asset within the meaning of Schedule 1.

Wasting chattels.

18. —(1) Subject to the provisions of this section, no chargeable gain shall accrue on the disposal of, or of an interest in, an asset which is tangible movable property and which is a wasting asset.

(2) Subsection (1) shall not apply to a disposal of, or of an interest in, an asset—

(a) if, from the beginning of the period of ownership of the person making the disposal to the time when the disposal is made, the asset has been used and used solely for the purposes of a trade, or profession, and if that person has claimed or could have claimed any capital allowance in respect of any expenditure attributable to the asset or interest under clause (a) or (b) of paragraph 3 (1) of Schedule 1, or

(b) if the person making the disposal has incurred any expenditure on the asset or interest which has otherwise qualified in full for any capital allowance.

(3) In the case of the disposal of, or of an interest in, an asset which, in the period of ownership of the person making the disposal, has been used partly for the purposes of a trade or profession and partly for other purposes, or has been used for the purposes of a trade or profession for part of that period, or which has otherwise qualified in part only for capital allowances—

(a) the consideration for the disposal, and any expenditure attributable to the asset or interest by virtue of the said clause (a) or (b), shall be apportioned by reference to the extent to which that expenditure qualified for capital allowances,

(b) the computation under the said Schedule 1 shall be made separately in relation to the apportioned parts of the expenditure and consideration, and

(c) subsection (1) shall not apply to any gain accruing by reference to the computation in relation to the part of the consideration apportioned to use for the purposes of the trade, or profession, or to the expenditure qualifying for capital allowances.

(4) Subsection (1) shall not apply to a disposal of commodities of any description by a person dealing on a terminal market or dealing with or through a person ordinarily engaged in dealing on a terminal market.

Government and other securities.

19. —The following shall not be chargeable assets—

(a) securities (including savings certificates) issued under the authority of the Minister for Finance;

(b) stock issued by any of the following authorities—

(i) a local authority;

(ii) a harbour authority mentioned in the First Schedule to the Harbours Act, 1946 ;

(c) land bonds issued under the Land Purchase Acts; and

(d) debentures, debenture stock, certificates of charge or other forms of security issued by the Electricity Supply Board, Córas Iompair Éireann, The Agricultural Credit Corporation, Limited, Bord na Móna, Aerlínte Éireann, Teoranta, Aer Lingus, Teoranta or Aer Rianta, Teoranta.

Life assurance and deferred annuities.

20. —(1) This section has effect as respects any policy of assurance or contract for a deferred annuity on the life of any person.

(2) No chargeable gain shall accrue on the disposal of, or of an interest in, the rights under any such policy of assurance or contract except where the person making the disposal is not the original beneficial owner and acquired the rights or interests for a consideration in money or money's worth.

(3) Subject to subsection (2), the occasion of the payment of the sum or sums assured by a policy of assurance or of the first instalment of a deferred annuity, and the occasion of the surrender of a policy of assurance or of the rights under a contract for a deferred annuity, shall be the occasion of a disposal of the rights under the policy of assurance or contract for a deferred annuity and the amount of the consideration for the disposal of a contract for a deferred annuity shall be the market value at that time of the right to that and further instalments of the annuity.

(4) In subsection (3) the reference to payment of the sum assured shall include a reference to the transfer of investments or other assets to the owner of the policy in accordance with the policy.

Superannuation funds.

21. —(1) A gain shall not be a chargeable gain if accruing to a person from his disposal of investments held by him as part of a fund approved under—

(a) section 222 of the Income Tax Act, 1967 ;

(b) section 235 (4) of the Income Tax Act, 1967 ;

(c) section 235A (5) of the Income Tax Act, 1967 (inserted by the Finance Act, 1974 ); or

(d) section 16 of the Finance Act, 1972 :

Provided that where part only of a fund is approved under any of the said sections, the gain shall be exempt from being a chargeable gain to the same extent only as income derived from the assets would be exempt under the relevant section under which approval was given.

(2) For the purposes of this section, the fund set up under section 6A of the Oireachtas (Allowances to Members) Act, 1938 (inserted by the Oireachtas (Allowances to Members) and Ministerial and Parliamentary Offices (Amendment) Act, 1960 ), shall be deemed to be a fund approved under section 16 of the Finance Act, 1972 .

Charities.

22. —(1) Subject to subsection (2), a gain shall not be a chargeable gain if it accrues to a charity and is applicable and applied for charitable purposes.

(2) If property held on charitable trusts ceases to be subject to charitable trusts—

(a) the trustees shall be treated as if they had disposed of, and immediately re-acquired, the property for a consideration equal to its market value, any gain on the disposal being treated as not accruing to a charity, and

(b) if and so far as any of that property represents, directly or indirectly, the consideration for the disposal of assets by the trustees, any gain accruing on that disposal shall be treated as not having accrued to a charity,

and an assessment to capital gains tax chargeable by virtue of paragraph (b) may be made at any time not more than ten years after the end of the year of assessment in which the property ceases to be subject to charitable trusts.

Other bodies.

23. —(1) A gain shall not be a chargeable gain if it accrues to—

(a) a registered trade union to the extent that its income is exempt from income tax under section 336 of the Income Tax Act, 1967 ,

(b) an unregistered friendly society whose income is exempt from income tax under section 335 (1) of the said Act, or

(c) a registered friendly society whose income is exempt from income tax under section 335 (1) of the said Act,

(d) a local authority,

(e) the Central Bank of Ireland,

(f) a health board,

(g) a vocational education committee established under the Vocational Education Act, 1930 , and

(h) a committee of agriculture established under the Agriculture Act, 1931 .

(2) In this section “local authority” has the meaning assigned to it by section 2 (2) of the Local Government Act, 1941 , and includes a body established under the Local Government Services (Corporate Bodies) Act, 1971 .

Miscellaneous exemptions for certain kinds of property.

24. —(1) The following shall not be chargeable gains—

(a) any bonus payable under an instalment saving scheme, within the meaning of section 53 of the Finance Act, 1970 ;

(b) prizes under section 22 of the Finance (Miscellaneous Provisions) Act, 1956 ;

(c) sums obtained by way of compensation or damages for any wrong or injury suffered by an individual in his person or in his profession.

(2) Winnings from betting, including pool betting, or lotteries or sweepstakes or games with prizes shall not be chargeable gains and rights to winnings obtained by participating in any pool betting or lottery or sweepstake or game with prizes shall not be chargeable assets.

(3) No chargeable gain shall accrue on the disposal of a right to, or to any part of—

(a) any allowance, annuity or capital sum payable out of any superannuation fund, or under any superannuation scheme, established solely or mainly for persons employed in a profession, trade, undertaking or employment, and their dependants, or

(b) an annuity granted otherwise than under a contract for a deferred annuity by a company as part of its business of granting annuities on human life, whether or not including instalments of capital, or

(c) annual payments which are due under a covenant made by any person and which are not secured on any property.

(4) (a) No chargeable gain shall accrue on the disposal of an interest created by or arising under a settlement (including, in particular, an annuity or life interest, and the reversion to an annuity or life interest) by the person for whose benefit the interest was created by the terms of the settlement or by any other person except one who acquired, or derives his title from one who acquired, the interest for a consideration in money or money's worth, other than consideration consisting of another interest under the settlement.

(b) Subject to paragraph (a), where a person who has acquired an interest in settled property (including in particular the reversion to an annuity or life interest) becomes, as the holder of that interest, absolutely entitled as against the trustee to any settled property, he shall be treated as disposing of the interest in consideration of obtaining that settled property (but without prejudice to any gain accruing to the trustee on the disposal of that property deemed to be effected by him under section 15 (3)).