Dáil Éireann Debate, Wednesday - 20 September 2023
165. Deputy Robert Troy asked the Minister for Finance if his Department can consider changes to the capital gains tax credit system to attach the credit to the landlords rather than the property (details supplied). [40293/23]
View answerAs the Deputy will be aware, Capital Gains Tax (CGT) is chargeable on a gain arising on the disposal of an asset at the rate of 33%.
I understand that the CGT credit referred to by the Deputy in his question is the annual exempt amount, which is provided for in section 601 of the Taxes Consolidation Act 1997. This gives an exemption to an individual in respect of the first €1,270 of chargeable gains in any one year of assessment. Where the gains accruing to the individual exceed that figure, only the excess over €1,270 is chargeable. In relation to the amount of chargeable gains against which the annual exempt amount may be set, any losses, be they losses arising in that year of assessment or carried forward from a previous year of assessment, must first be set off against gains. As such, it is not permissible to set the annual exempt amount against gross chargeable gains, thus leaving losses which can be set off in the year of assessment or available for carry forward to a later year. The exemption does not apply to an individual who has obtained relief under section 598 (disposal of business or farm on “retirement”) or section 599 (disposal within family of business or farm) of the Taxes Consolidation Act 1997.
Should a chargeable gain arise on the disposal by a landlord of a rental property, the annual exempt amount is available for offset against that gain or, should other assets have been disposed of in the same year of assessment, against the net chargeable gains arising to the landlord in the year of assessment. As such, the annual exempt amount is not attributable to gains arising on the disposal of a specific asset; instead, it is set against the net chargeable gains arising to a chargeable person in respect of all disposals of assets made by the chargeable person in that year of assessment. In this way, the benefit of the exemption accrues to the chargeable person, and not to any specific asset disposed by them.
