Capital gains tax in Ireland

What is the Irish CGT framework?

Irish Capital Gains Tax is charged under Part 19 of the Taxes Consolidation Act 1997 (TCA 1997) at a single flat rate of 33% on chargeable gains (raised from 25% in Budget 2013). Material features:

• Flat 33% rate: Unlike most income-tax systems with progressive brackets, Irish CGT is a single flat rate regardless of the size of the gain or the filer's overall income level. The 33% rate is among the highest CGT rates in Europe.
• Annual exemption EUR 1,270: Each individual receives the first EUR 1,270 of gains free from CGT per tax year (Section 601 TCA 1997). Spouses each receive their own EUR 1,270 separately. The exemption is non-transferable between years.
• Two payment dates: Irish CGT has a unique two-instalment payment structure. Disposals between 1 January and 30 November: tax due 15 December of the same year. Disposals between 1 December and 31 December: tax due 31 January of the following year. The two-window structure means December disposals defer the cash payment by approximately one year.
• Form CG1 self-assessment return: Individuals report capital gains on Form CG1 (separate from Form 11). Companies report capital gains on Form CT1 corporation tax return (taxed at 33% to match the individual rate).

The CGT regime applies to disposals of chargeable assets including land and buildings, shares and securities, business assets, intangibles, and personal property above a threshold value. Foreign currency held as an investment is a chargeable asset; foreign currency held for personal purposes is generally exempt.

Cost base and indexation

The chargeable gain is calculated as disposal consideration minus the cost base (allowable expenditure). The cost base composition:

• Acquisition cost: The amount paid (or market value in non-arm's-length acquisitions).
• Incidental costs of acquisition: Stamp duty, professional fees, agent commissions.
• Enhancement expenditure: Capital expenditure reflected in the state or nature of the asset at the date of disposal.
• Incidental costs of disposal: Professional fees, agent commissions on sale.

Indexation relief was historically available to adjust the cost base for inflation between acquisition (or 6 April 1974) and disposal (or 31 December 2002). For assets disposed of on or after 1 January 2003, indexation continues to be available BUT is FROZEN at the December 2002 indexation factor. This freeze materially erodes the relief for long-held assets:

• Assets acquired pre-2003: indexation runs from acquisition date to December 2002 only — no further indexation for periods after 2003.
• Assets acquired post-2003: no indexation available.

The frozen-indexation regime means the cost base of a long-held asset is essentially fixed in nominal terms, so material inflation erodes real returns and the CGT applies to nominal gains rather than real gains. Practitioners running calculations for long-held assets verify whether the December 2002 freeze leaves any meaningful indexation benefit.

Connected-persons transactions under Section 549 TCA 1997 are deemed to be at market value, regardless of actual consideration — preventing artificial value transfers between family members or related entities to manipulate CGT.

Principal Private Residence (PPR) relief

Principal Private Residence relief under Section 604 TCA 1997 exempts the disposal of a dwelling-house used as the filer's main residence:

• Full exemption: Where the dwelling was the filer's main residence (and used solely for private purposes) throughout the entire ownership period.
• Partial exemption: Where the dwelling was the main residence for only part of the ownership period, OR where the dwelling was used for any non-private purpose (e.g. partial business use, partial rental).
• Final 12 months always exempt: The last 12 months of ownership are deemed to be 'main residence' time regardless of actual use — eliminating CGT exposure during the typical period between vacating and disposal.
• Garden and grounds: PPR relief extends to garden and grounds up to one acre — beyond one acre, the excess area may be partially chargeable.

Key extensions and traps:

• Letting relief — restricted post-2018: The 'rented residence relief' regime that allowed limited PPR continuation during letting was substantially restricted by Finance Act 2017. The current letting relief requires the property to remain the main residence during the letting period — which substantially narrows the relief.
• Construction or development period: Up to 12 months of pre-completion or pre-move-in period can qualify as PPR where the filer subsequently occupies the dwelling.
• Job-related necessity: PPR can continue during a period of necessary absence for employment (subject to specific conditions).
• Married couples and partners: Only ONE dwelling may be the PPR for a married couple or civil partnership at any one time — separate PPR elections are not available.

The PPR relief is materially valuable for Irish residents — for a homeowner who has lived in a property throughout ownership, the relief eliminates the 33% CGT on substantial appreciation.

Entrepreneur Relief — Section 597AA TCA 1997

Entrepreneur Relief under Section 597AA TCA 1997 provides a reduced 10% CGT rate (vs the standard 33%) on the first EUR 1 million of lifetime gain on qualifying business asset disposals:

• Lifetime limit: EUR 1 million of cumulative qualifying gains per individual. Once exhausted, subsequent qualifying disposals attract the standard 33% rate.
• Qualifying assets: Chargeable business assets owned for more than 3 years. For shares: at least 5% holding in a qualifying trading company AND the individual must have been a working director for at least 3 of the preceding 5 years.
• Working director requirement: The individual must have devoted 'substantially the whole' of their time to the company's service as a working director or full-time employee for at least 3 of the 5 years preceding disposal.
• Qualifying trading company: Must be carrying on a qualifying trade (excluding investment activities, passive landholding, dealing in shares as principal activity).

A SME owner disposing of qualifying shares with a EUR 1.5 million chargeable gain receives:

• First EUR 1 million: 10% × EUR 1 million = EUR 100,000 CGT (Entrepreneur Relief rate).
• Remaining EUR 500,000: 33% × EUR 500,000 = EUR 165,000 CGT (standard rate).
• Total CGT: EUR 265,000.

Without Entrepreneur Relief: 33% × EUR 1.5 million = EUR 495,000 CGT. The relief delivers EUR 230,000 of saving in this example — material for SME exits but narrower than the UK's pre-2024 Entrepreneur's Relief / Business Asset Disposal Relief (GBP 1 million at 10%) and substantially narrower than the original USD-equivalent quantum.

The Irish Entrepreneur Relief has been politically contested as inadequate compared with international peers. Various reform proposals have considered raising the lifetime cap or reducing the rate further, with mixed success in implementation.

Retirement Relief — Section 598 TCA 1997

Retirement Relief under Section 598 TCA 1997 exempts qualifying business asset disposals by individuals aged 55+ from CGT:

• Family transfers: Historically unlimited exemption on transfers to a 'child' (broadly defined to include children, grandchildren, nieces/nephews working full-time, and certain spouses). Finance Act 2024 introduced a EUR 10 million cap on the family-transfer exemption for transferors aged 70+ (effective for disposals from 1 January 2025).
• Third-party disposals (non-family): EUR 750,000 lifetime cap on consideration (raised from EUR 500,000 in Finance Act 2018) for individuals aged 55-69. For individuals aged 66+, the cap reduces to EUR 500,000 for third-party disposals.
• Qualifying assets: Chargeable business assets owned 10+ years (with continuous trading/professional use). For shares: at least 5% holding in a qualifying trading company.
• Aggregate test: Once the EUR 750,000 cap is exceeded on third-party disposals, marginal relief applies — preventing a cliff-edge where exceeding the cap by EUR 1 triggers full CGT on the entire disposal.

The Retirement Relief mechanism is the principal Irish business-succession planning tool, particularly for family-business transfers to the next generation. The 10-year holding requirement and 55+ age threshold align the relief with genuine retirement events rather than tax-driven asset rotations.

Non-residents and specified assets

Non-residents are subject to Irish CGT only on Irish-situate 'specified assets' under Section 29 TCA 1997:

• Irish land and buildings: Real estate physically located in Ireland.
• Irish minerals and mineral exploration rights: Including offshore exploration rights in Irish-controlled waters.
• Assets of an Irish trade: Business assets used through an Irish branch or agency.
• Unquoted shares deriving value from Irish land: Since 1 January 2017 — shares in unquoted companies where the value of the underlying assets is at least 50% derived from Irish land. Closes the structural avoidance route that previously allowed non-residents to dispose of holding-company shares without Irish CGT.

For non-residents disposing of Irish-situate land or buildings, the 15% CGT clearance certificate regime under Section 980 TCA 1997 requires the purchaser to withhold 15% of consideration above EUR 500,000 UNLESS the vendor provides a CG50A clearance certificate from Revenue. The 15% is a payment-on-account against the non-resident's final CGT liability.

For cross-border investments by Irish residents, see Ireland tax-treaty-relief for the treaty network and Ireland expat-tax-residency for the residency and domicile framework.

Capital losses and quarantine

Capital losses arising from chargeable asset disposals are quarantined within the CGT regime:

• Cannot offset other income: Capital losses cannot reduce income tax liability on salary, business profit, dividends, or interest. Income/gains separation maintained.
• Offset within the year: Current-year losses offset current-year gains on a euro-for-euro basis before the EUR 1,270 annual exemption.
• Indefinite carry-forward: Unused losses carry forward to subsequent years without time limit.
• No carry-back: Losses cannot be carried back to earlier years (one limited exception: terminal losses on cessation of a trade may carry back to certain prior years).

The loss application order: (1) current-year losses against current-year gains; (2) brought-forward losses against remaining current-year gains; (3) EUR 1,270 annual exemption against remaining net gain.

Connected-persons losses under Section 549 TCA 1997 are deductible only against gains arising from disposals to the same connected person — an anti-avoidance rule preventing artificial losses through related-party transactions.

Special asset categories

Several asset categories have specific CGT treatment:

• Shares in quoted companies: Standard CGT applies. First In First Out (FIFO) cost-base identification.
• Foreign shares: Standard CGT applies for Irish residents/domiciliaries on worldwide gains. Foreign-domiciled Irish residents may use the remittance basis under specific conditions.
• Unit trusts and investment funds: Different regime — see Ireland dividend-and-investment-tax for the gross-roll-up framework and 41% exit tax.
• Collectibles and personal-use property: Generally subject to CGT, with some exemptions for tangible movable property below specific thresholds.
• Government securities: Most Irish government securities are CGT-exempt.
• Life assurance policies: Distinct regime under different sections.
• Wasting chattels: Tangible movable property with a predictable life under 50 years (e.g. cars used personally) is exempt from CGT.

For practitioners managing US-side reporting for Irish residents holding US assets (Form 1099-B, Form 1099-DIV, cost-basis tracking), Tax1099 handles the US workflow. EUR-USD foreign-currency banking for cross-border investment routes through WorldFirst.

Compliance and Form CG1

CGT compliance requires:

• Form CG1: Annual self-assessment return reporting capital gains. Required even if no CGT is due (provided gains exceed the EUR 1,270 exemption — those entirely within the exemption may have lighter reporting).
• Payment dates: 15 December (for January-November disposals) and 31 January following year (for December disposals).
• Record retention: 6 years from the end of the tax year (general Irish tax record-retention rule).
• Pay & File Tax Return: Form 11 captures CGT alongside income tax for individuals with both types of income.

For the broader Irish tax stack, see the Ireland country overview, Ireland self-employed tax for sole-trader CGT interactions, Ireland small business tax for corporate CGT and Entrepreneur Relief integration, and the Capital gains tax topic hub for cross-jurisdiction comparison. To find a Chartered Accountant Ireland or CPA Ireland member who handles complex CGT including Entrepreneur Relief, Retirement Relief, and non-resident specified-asset disposals, browse the Ireland tax-pros directory.