10. Timely returns - ensure you pay and file your returns on time:
You must file a return for any 2017 gains or losses by the return filing date in 2018. Preliminary tax for capital gains tax is due as follows:
Disposals up to 30 November 2018 are due by 15 December 2018.Disposals in December 2018 – tax due 31 January 2019.Capital gains tax applies on all disposals whether consideration (money) passes. The rate is 33%.
With this in mind, availability of reliefs is paramount to minimising the tax. An annual exemption of €1,270 applies. Therefore, you can make a gain of €1,270 and no gain applies.
11. Transfer of site to a child
A site of up to one acre and up to a value of €500,000 can be made free from capital gains tax.
It must be for the construction of the son or daughter’s principal private residence.
If the house is not built and the site is disposed of, the relief can be clawed back.
Beware of the value of the site as this will reduce the threshold for gift tax.
12. Entrepreneurial relief:
A 10% rate of tax applies on the sale of all or part of a farm business on sales from 1 January 2017.
It does not apply to investments or development land. It applies on gains up to €1m.
13. Disposal to company:
A relief applies where you dispose of all of your business and all assets to a company and no CGT applies.
However, conditions apply and need to be looked at on an individual basis.
14. Restructuring relief:
If you dispose of and acquire agricultural land within 18 months of the earlier transaction a cgt relief applies.
The sale or purchase swap must be between farmers who spend not less than 50% of their time farming.
If you are disposing of assets, examine if you have unused losses. Have you assets that are of less value than you acquired them at? Could you dispose of these to generate a loss?
15. Small disposals:
The disposal of an asset with a value not exceeding €2,500 is exempt from CGT.
16. Offshore property:
It is vital that all offshore property and income arising from same is correctly reported in your annual income tax return.
Significant penalties will arise where offshore property is not included, or incorrectly returned in your income tax return.
17. Transfers between spouses:
While exempt from CGT beware of the effect it may have on retirement relief.
18. Capital acquisitions tax:
Returns must be filed by 31 October 2018 on any gift/inheritances received in the year to 31 August 2018. Gift tax applies to a lifetime transfer. Inheritance tax applies to a transfer on death. The thresholds that one can receive tax free are as follows:
Class A, parent: €310,000.Class B, Relative: €32,500.Class C, non-blood relative:€16,250.One can receive by way of a gift an amount of €3,000 from any person in a calendar year without affecting your threshold. No gift or inheritance tax applies between spouses.
19. Certain medical expenses:
A gift or inheritance taken exclusively to discharge medical expenses of a permanently incapacitated individual is exempt.
20. Stately houses/works of art/gardens:
If your property is of national, scientific or artistic interest and is kept permanently in the state and is open for viewing, it can be exempt.
21. Business relief:
If you do not qualify for agricultural relief, business relief may be available.
It applies to transfer of a business or part of a business.It does not apply to an individual asset.It reduces the value of the asset by 90%.22. Agricultural relief:
This relief reduces the value of the asset you are receiving by 90%. If you receive €2m of agricultural property you will only be taxed on €200,000, ie 10% of its value. Ensure you meet the conditions to qualify for this relief.
Beware of clawback of the relief if you fail to satisfy the conditions.
Relief has been extended to include land let to solar panel companies. This land will only be considered agricultural property where less than 50% of the land being transferred is under solar panels.
23. Favourite nephew/niece relief:
Could you qualify for this relief? If you qualify you would be treated as a child for the purposes of the tax-free amount thresholds.
24. CGT offset v CAT:
If both liabilities are on the same event, then relief is available to offset the CGT versus the CAT.
25. Free use of property:
If you have use of property for free or below market value, please be aware that this amount is regarded as an annual benefit and could affect some or all of the amount you can get tax-free.
26. Retirement relief:
Family: within the family you can transfer/dispose of chargeable business assets and provided certain conditions are met no capital gains tax will apply. If you are over 66, a limit of €3m applies.Non-family: you can transfer /dispose of assets up to €750,000 and have no liability. If you are over 66, the limit is reduced to €500,000.Relief has been extended to include land let to solar panel companies. This land will only be able to avail of this relief if the land under solar panels is less than 50% of the total land being sold.
27. Insurance
If a high liability to inheritance
tax is likely, have you examined the possibility of an inheritance tax insurance policy?
Read more
Top 50 tax-saving tips: VAT
Top 50 tax-saving tips: capital gain tax
Top 50 tax-saving tips: income tax
10. Timely returns - ensure you pay and file your returns on time:
You must file a return for any 2017 gains or losses by the return filing date in 2018. Preliminary tax for capital gains tax is due as follows:
Disposals up to 30 November 2018 are due by 15 December 2018.Disposals in December 2018 – tax due 31 January 2019.Capital gains tax applies on all disposals whether consideration (money) passes. The rate is 33%.
With this in mind, availability of reliefs is paramount to minimising the tax. An annual exemption of €1,270 applies. Therefore, you can make a gain of €1,270 and no gain applies.
11. Transfer of site to a child
A site of up to one acre and up to a value of €500,000 can be made free from capital gains tax.
It must be for the construction of the son or daughter’s principal private residence.
If the house is not built and the site is disposed of, the relief can be clawed back.
Beware of the value of the site as this will reduce the threshold for gift tax.
12. Entrepreneurial relief:
A 10% rate of tax applies on the sale of all or part of a farm business on sales from 1 January 2017.
It does not apply to investments or development land. It applies on gains up to €1m.
13. Disposal to company:
A relief applies where you dispose of all of your business and all assets to a company and no CGT applies.
However, conditions apply and need to be looked at on an individual basis.
14. Restructuring relief:
If you dispose of and acquire agricultural land within 18 months of the earlier transaction a cgt relief applies.
The sale or purchase swap must be between farmers who spend not less than 50% of their time farming.
If you are disposing of assets, examine if you have unused losses. Have you assets that are of less value than you acquired them at? Could you dispose of these to generate a loss?
15. Small disposals:
The disposal of an asset with a value not exceeding €2,500 is exempt from CGT.
16. Offshore property:
It is vital that all offshore property and income arising from same is correctly reported in your annual income tax return.
Significant penalties will arise where offshore property is not included, or incorrectly returned in your income tax return.
17. Transfers between spouses:
While exempt from CGT beware of the effect it may have on retirement relief.
18. Capital acquisitions tax:
Returns must be filed by 31 October 2018 on any gift/inheritances received in the year to 31 August 2018. Gift tax applies to a lifetime transfer. Inheritance tax applies to a transfer on death. The thresholds that one can receive tax free are as follows:
Class A, parent: €310,000.Class B, Relative: €32,500.Class C, non-blood relative:€16,250.One can receive by way of a gift an amount of €3,000 from any person in a calendar year without affecting your threshold. No gift or inheritance tax applies between spouses.
19. Certain medical expenses:
A gift or inheritance taken exclusively to discharge medical expenses of a permanently incapacitated individual is exempt.
20. Stately houses/works of art/gardens:
If your property is of national, scientific or artistic interest and is kept permanently in the state and is open for viewing, it can be exempt.
21. Business relief:
If you do not qualify for agricultural relief, business relief may be available.
It applies to transfer of a business or part of a business.It does not apply to an individual asset.It reduces the value of the asset by 90%.22. Agricultural relief:
This relief reduces the value of the asset you are receiving by 90%. If you receive €2m of agricultural property you will only be taxed on €200,000, ie 10% of its value. Ensure you meet the conditions to qualify for this relief.
Beware of clawback of the relief if you fail to satisfy the conditions.
Relief has been extended to include land let to solar panel companies. This land will only be considered agricultural property where less than 50% of the land being transferred is under solar panels.
23. Favourite nephew/niece relief:
Could you qualify for this relief? If you qualify you would be treated as a child for the purposes of the tax-free amount thresholds.
24. CGT offset v CAT:
If both liabilities are on the same event, then relief is available to offset the CGT versus the CAT.
25. Free use of property:
If you have use of property for free or below market value, please be aware that this amount is regarded as an annual benefit and could affect some or all of the amount you can get tax-free.
26. Retirement relief:
Family: within the family you can transfer/dispose of chargeable business assets and provided certain conditions are met no capital gains tax will apply. If you are over 66, a limit of €3m applies.Non-family: you can transfer /dispose of assets up to €750,000 and have no liability. If you are over 66, the limit is reduced to €500,000.Relief has been extended to include land let to solar panel companies. This land will only be able to avail of this relief if the land under solar panels is less than 50% of the total land being sold.
27. Insurance
If a high liability to inheritance
tax is likely, have you examined the possibility of an inheritance tax insurance policy?
Read more
Top 50 tax-saving tips: VAT
Top 50 tax-saving tips: capital gain tax
Top 50 tax-saving tips: income tax
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