Dáil Éireann Debate, Tuesday - 8 October 2024
113. Deputy Ged Nash asked the Minister for Finance further to his reply to Parliamentary Question No. 133 of 26 September 2024, the number of persons it is anticipated that stand to benefit from the changes announced in Budget 2025 in regard to the capital gains tax retirement relief regime, based on the assessment contained in his reply to the referenced Parliamentary Question; and if he will make a statement on the matter. [40248/24]
View answerSection 599 of the Taxes Consolidation Act 1997 (‘TCA 1997’) provides for relief from Capital Gains Tax (‘CGT’) on the disposal of qualifying assets by individuals aged 55 years or more to a child, as defined in the section.
Following the enactment of Finance (No.2) Act 2023, where an individual aged 55 to 69 years, inclusive, transfers qualifying assets to a child on or after 1 January 2025, a €10 million lifetime limit applies to the value of the qualifying assets which may be relieved from CGT in full under section 599 TCA 1997.
In delivering Budget 2025 on 1 October last, I confirmed that, as part of Finance Bill 2024, should a CGT liability arise on the transfer, on or after 1 January 2025, of qualifying assets, the value of which exceeds this lifetime limit, such CGT liability may be deferred by the individual making the disposal on the basis that the child to whom the qualifying assets transfer continues to hold the qualifying assets for a period of 12 years. Should the child dispose of the qualifying assets prior to the end of this retention period, the child becomes liable for the individual’s deferred CGT liability, as well as any CGT liability which arises in respect of any chargeable gain accruing to the child on their disposal of the assets. Should the child retain ownership of the assets for the whole of the retention period, they may claim an abatement of the deferred CGT on the expiry of the retention period.
As the proposed deferral and potential abatement of CGT liabilities arising in the circumstances outlined above will only apply to transfers of qualifying assets which take place on or after 1 January 2025, the number of persons who may, in the future, benefit from the proposed amendment cannot be quantified based on current data.
