Capital Gains Tax Ireland, Self Assessment Ireland - Capital Gains

The self-assessment system for Capital Gains Tax applies to anyone who is self employed, a director of a company, or has income not taxed through the PAYE system.

It also applies to anyone with capital gains even if all their income is taxed PAYE.

A payment on account for the initial period ended 30th September 2005, known as preliminary tax, must be made on or before 31st October 2005 (or 17th November for filing via ROS).

A payment on account for the secondary or balancing period ended 31st December 2005 must be made on or before 31st January 2006.

The amount of preliminary tax payable each year is the taxpayer's estimated tax liability after giving a credit for tax deducted at source and allowances and credits.

All taxpayers, with some exceptions outlined below, must:

1) Pay preliminary tax on or before 31 October of each year. Preliminary Capital Gains Tax payments for the tax year ending 31 December 2005 should be paid as follows:
- gains made between 1st January 2005 and 30th September 2005 on or before 31 October 2005 and
- gains made between 1st October 2005 and 31st December 2005 on or before 31st January 2006.

2) There is a provision for the payment of preliminary tax in installments by means of a direct debit. Taxpayers wishing to avail of this may base the amount of preliminary tax to be paid in this way on 105% of the tax payable for the pre-preceding year.

3) Make a tax return on or before 31 October each year. A tax return, showing details of all gains for the tax year ended 31st December 2005 must be submitted on or before 31 October 2006 or 17th November 2006 if filing on line using ROS.

4) If the preliminary tax paid for 2005 is insufficient, pay the balance of tax due for 2005 on or before 31 October 2006.

5) The exceptions are:

a) Anyone, other than directors and their spouses, who pay all their income tax under the PAYE system and who does not have a capital gains tax liability.

b) Anyone who has been advised by their Inspector of Taxes that they are not liable to pay preliminary tax and who does not have a capital gains tax liability.

PENALTIES

You will be charged interest if preliminary taxes are not paid on time.
You will also be charged interest if your preliminary income tax payment is less than 90% of the final income tax liability for the year, or 100% of the previous year's agreed income tax liability (excluding BES relief and relief for investment in films), whichever is lower. As mentioned above, you also have the option to pay 105% of the pre- preceding year (excluding BES and film investment relief).

Interest will be charged on preliminary CGT payments which are less than 100% of the final CGT liability for the year.

If you fail to make a tax return before 31 October you will suffer a surcharge on your tax liability. Directors and their spouses who fail to make a tax return on time will incur the surcharge on their tax liability ignoring the tax paid under PAYE.

The surcharge payable on the submission of late returns is 5% of the tax liability (subject to a maximum of €12,700) where the return is filed within two months of the deadline.

If the return is filed more than two months after its proper filing date a 10% surcharge will apply (subject to a maximum of €?63,487).

A sample of returns will be subjected to a detailed Revenue audit.