Regarding the Deputy’s question concerning an exemption from Capital Gains Tax (CGT) provided to religious orders, I am informed by Revenue that Section 609 of the Taxes Consolidation Act 1997 (the Act) provides that a gain on a disposal of an asset is not a chargeable gain if it accrues to a charity and is applied for charitable purposes.
“Charity” is defined for capital gains tax purposes in section 5 of the Act by reference to the meaning of that term in section 208 of the Act, which grants exemption from income tax in respect of certain income of charities. In section 208, the term “charity” means any body of persons or trust established for charitable purposes only. Essentially, therefore, any such body that qualifies for exemption from income tax under section 208 also qualifies for exemption from capital gains tax. Consequently, this means that, in general, gains on disposals of land by religious orders will be exempt from capital gains tax.
As with all taxes, CGT is subject to ongoing review, which involves the consideration and assessment of the rate of CGT and the relevant reliefs and exemptions from CGT. CGT policy and legislation is reviewed by the Tax Strategy Group (TSG), as part of the annual Budget and Finance Bill process, and is considered in the wider tax policy context.