Capital Taxes
Capital Gains Tax (CGT), Capital Acquisitions Tax (CAT) and Stamp Duty are the applicable capital taxes in Ireland. These taxes arise on capital transactions such as sales/transfers of property, shares and other chargeable assets.
CGT
The sale or transfer of assets (e.g. by way of gift) will give rise to CGT considerations for clients. We specialise in minimising CGT for our clients by:
· Ensuring all available qualifying expenses are claimed
· Capital loss crystallisation and planning to shelter capital gains
· Advising on CGT reliefs and exemptions such as CGT Retirement Relief and Entrepreneur Relief
· Timing of transfers of assets where values are low to the next generation in the context of succession planning
· Claiming Corporate CGT reliefs on disposals of certain properties and assets such as trading subsidiary companies
In the context of the interaction of CGT with the other capital taxes, CGT arises on the sale/transfer of assets during an individual’s lifetime. CGT does not arise on death of an individual (but CGT may have to be considered by the Estate of an individual where assets are being sold during the administration period).
CAT
Capital Acquisitions Tax (CAT) can arise where an individual receives a gift or inheritance of an asset. The key differential between a gift and inheritance in general is that a gift arises otherwise than on a person’s death. The beneficiary in both situations must consider their exposure to CAT. We specialise in minimising CAT for our clients by:
· Implementing long-term retirement and succession plan as early as possible
· Timing the transfer of assets with low to the next generation in the context of succession planning (e.g. lifetime gift versus by inheritance on death)
· Availing of the “same event credit” for CGT paid against CAT payable on a gift of an asset
· Advising on available CAT reliefs and exemptions such as the Annual Small Gift Exemption, Business Relief, Agricultural Relief and Dwelling House Relief
Stamp Duty
Business and property transactions can give rise to a charge to Stamp Duty which is a cost to be factored into the overall cost of a transaction. The current rates of Stamp Duty are 1%-2% depending on the subject matter of the transaction. Where the opportunities arise, we work with our clients and their legal advisers in minimising this charge by availing of exemptions and reliefs such as:
· Associated Company relief where assets are transferred between associated group companies
· Reorganisation reliefs where corporate restructurings occur, e.g. share for share exchanges between companies
A detailed and thoroughly knowledge of these capital taxes with the available reliefs and exemptions form an intricate part of Retirement and Succession Planning for our clients.