Questions and Answers

Capital Gain Tax

Q: I inherited a house in early 2015 and at the time paid a substantial amount of Capital Acquisitions Tax (CAT) to Revenue. I have now sold the house in December 2015. Do I need to pay any additional tax? If so can the CAT paid reduce this tax?

A: You are obliged to pay capital gains tax (CGT) on the profit realised when selling the property. The profit in this case will be the difference between the market value at the time of inheritance versus the selling price in December.

Unfortunately the CAT paid cannot be used to reduce the CGT you are now due to pay. CGT can only be offset against CAT on the “same event” disposal of an asset. For example, if the property was gifted to you there would be CGT for the person gifting and CAT due for you as the person receiving the asset.

If you disposed of the property between the 1^st and 31^st of December 2015, you will need to make a preliminary CGT payment by 31^st January 2016 and file the details on your 2015 income tax return

Date published 28 Jan 2016

This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.

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