Vol. 490 No. 6
53 Mr. Higgins (Dublin West) asked the Minister for Finance the procedure used for collecting capital gains tax from individuals; the special measures, if any, being undertaken to ensure that all capital gains on shares realised are subjected to capital gains tax in view of the large gains made on the Irish Stock Exchange in 1997; and the circumstances, if any, that allows a taxpayer to defer the payment of capital gains tax. [10860/98]
Capital Gains Tax (CGT) is collected by self-assessment. Self-assessment of CGT applies to all CGT liabilities for all persons, i.e. self-employed and others directly assessed to tax, persons on PAYE and persons not already within the tax system.
The due date for paying CGT preliminary tax is 1 November in the year following the year of assessment. The due date for paying preliminary tax for the year of assessment 1997-8 i.e. in respect of chargeable gains made in the year ended 5 April 1998, is therefore 1 November 1998. The amount of preliminary tax paid on 1 November must be not less than 90 per cent of the final CGT liability.
A return of chargeable gains must be made on or before 31 January in the year following the year of assessment and the balance of the CGT due must be paid. For chargeable gains made in 1997-8 a return must be made on or before 31 January 1999. The obligation to make a return exists even where a person has not been issued with a return form by the inspector of taxes.
Failure to submit a return on time will result in a surcharge being added to the basic CGT due. Interest is also charged on overdue returns.
No special arrangements have been introduced to deal specifically with capital gains from sales of shares. However, certain tax districts have particular expertise in dealing with the tax affairs of individuals with substantial personal investment portfolios.
There are a number of reliefs which enable taxpayers to defer the liability arising on their capital gains. The principal reliefs are:
Roll over relief on trade assets, where a person reinvests either all or a large portion of the proceeds from the disposal of old business assets in new business assets; and roll over relief on shares where, subject to certain qualifying conditions, the CGT arising on the sale of shares can be fully deferred, if an adequate level of the proceeds are reinvested in other shares in certain Irish trading companies.
There is no relief which enables an individual who disposes of quoted shares and reinvests in other quoted shares to defer the tax arising on gains realised in those circumstances.
