Dáil Éireann debate -
Tuesday, 12 Oct 1999

Vol. 509 No. 1

Written Answers. - Tax Code.

Noel Ahern

Question:

175 Mr. N. Ahern asked the Minister for Finance the situation for single persons and couples in relation to the annual exemption limit for capital gains tax; the length of time the present exemption limits exist; if the exemptions in the United Kingdom are seven times our limit; the exemption limits which apply in other EU member states; and if he will increase the limit in the coming budget in order to coincide with Government policy to increase numbers of shareholders in society. [19495/99]

Minister for Finance (Mr. McCreevy)

The first £1,000 of a chargeable gain accruing to an individual in a year of assessment is exempt from capital gains tax. This annual exemption was introduced in the Capital Gains Act, 1975 at £500, was increased in 1982 to £2,000 and changed to £1,000 in 1992. However, since 6 April 1998 the transfers of all or part of one spouse's unused exemption to the other spouse is now no longer allowed. Of course, where assets are held jointly then both individuals are entitled to make use of their individual exemption of £1,000.

I am informed that in the United Kingdom an individual has an annual exemption of £7,100 which is allowed against the chargeable gain. Both spouses are entitled to this annual exemption amount. While this limit is significantly higher than the rate applying in Ireland, most capital gains in this country are charged at a rate of 20 per cent as opposed to 23 per cent and 40 per cent in the United Kingdom.

In relation to exemption limits applying in other EU member states, I regret to inform the Deputy that it has not been possible in the time allowed to ascertain the limits, if any, that apply in these countries as this information is not readily available.

Regarding the Deputy's proposal for an increase in the current exemption limit, I have no proposals to increase the exemption limit at present.