A charge to capital gains tax, CGT, arises in respect of chargeable gains accruing on the disposal of assets. Such gains are computed in accordance with the provisions of the Capital Gains Tax Acts. The charge extends to individuals, companies and unincorporated bodies of persons. There is no provision in those Acts to exempt children. Accordingly, gains arising on children's shareholdings are liable to CGT in the same manner as gains arising to other individuals.
I have been advised by the Revenue Commissioners that they have written to First Active members who received payment from the Royal Bank of Scotland in respect of its acquisition of First Active. As with previous disposals of shares in this type of situation, this transaction gives rise to a potential capital gains tax, CGT, liability on the members in respect of the disposal of their First Active shares. Any CGT liability on disposal of these shares is due for payment on or before 31 October 2004. First Active shareholders have been notified by Revenue of their CGT obligations.
From the information supplied to the Revenue Commissioners, the person referred to by the Deputy received a payment of €3,069 from Royal Bank of Scotland and, provided she had no other gain or loss, her CGT liability is calculated as follows:
Cash Received
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€3,069
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Allowable Costs
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Nil (as the shares were acquired at no cost they have a nil base)
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Chargeable Gain
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€3,069
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Less Personal Exemption
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(€1,270)
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Net Chargeable Gain
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€1,799 @ 20% = €359.80
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The chargeable gain above can be reduced by any allowable losses arising in 2004 together with any unused allowable losses from disposals of assets chargeable to capital gains tax in any previous year.
I have also been informed by the Revenue Commissioners that the Revenue documentation sent to the person includes a computation sheet and a payslip. The payslip and payment should be sent to the Collector General's office. The documentation issued also includes a special Revenue help-line number for any further assistance required by the person referred to by the Deputy.