As the Deputy will be aware, I announced changes in this area in last week's budget. Certain tax rules, which, until then, allowed individuals to avoid a capital gains tax charge by selling assets during a period of temporary residence abroad, were changed. In future, where an Irish domiciled individual ceases to be tax resident in the State for a tax year, then, subject to certain conditions, certain assets will be deemed, for capital gains tax purposes, to be disposed of and reacquired by that individual on the last day of the tax year immediately preceding the tax year when he or she ceased to be tax resident.
This disposal and reacquisition will be deemed to occur where: the individual again becomes Irish tax resident before the end of a continuous period consisting of five complete tax years commencing with the year of cessation; and during his or her temporary non-residence, the individual disposes of the assets concerned, which disposal does not result in an Irish tax charge under other existing rules; and the assets concerned are all or part of a significant interest in a company, whether in Ireland or abroad.
An individual will be regarded as having a significant interest in a company if he or she owns 5% or more by value of the share capital of the company, or owns an interest in the company, the value of which exceeds €500,000.
These changes take effect in respect of individuals who, on or after 4 December 2002, cease to be tax resident in the State.