Capital Gains Tax (CGT) In Ireland

Capital Gains Tax (CGT) is one of the most misunderstood areas of Irish taxation. Many people assume it only applies when selling a second property, but in reality it covers a wide variety of disposals: shares, investments, business assets, land, and even cryptocurrency. Knowing how it works – and how to minimise your can make a huge difference to your finances.

In this guide, we’ll explore what CGT is, how it’s calculated, the deadlines you need to know, common pitfalls and edge cases, and why using a service like Irish Tax Hub’s CGT Review could save you both time and money.

What Exactly Is Capital Gains Tax?

CGT is a tax on the profit (or “gain”) you make when you dispose of an asset. Disposal doesn’t just mean selling. It can also mean gifting, exchanging, transferring, or even receiving compensation (for example, an insurance payout for a destroyed asset). The rate is currently 33%, which means a third of your net profit goes to Revenue.

Your liability depends on your residency and domicile:

• If you are resident, ordinarily resident, and domiciled in Ireland, you are taxed on worldwide gains
• If you are resident but not domiciled, you are taxed on Irish gains and foreign gains remitted into Ireland
• If you are non-resident, you may still be taxed on Irish property and certain business assets

This means even people who don’t live in Ireland full-time can be caught by CGT.

How Do You Calculate CGT?

The basic formula is:

Sale Price – (Purchase Price + Improvement Costs + Allowable Expenses + Indexation Adjustment) – Annual Exemption = Taxable Gain × 33%

Use our CGT calculators to estimate your liablity;

• CGT on property sale
• CGT on share sale

Key points:

• Allowable expenses include legal fees, stamp duty, and broker commissions
• Improvement costs cover enhancements to the asset but not routine maintenance
• Indexation relief adjusts the original purchase price for inflation, but only up to 31 December 2002
• All Irish tax residents are entitled to claim the €1,270 annual exemption, so the first €1,270 of gains are tax free

Example

You bought a property for €200,000 in 2000. With indexation, this is treated as €225,000. You sell it in 2025 for €300,000. That’s a gain of €75,000. Subtract the exemption of €1,270, leaving €73,730. Multiply by 33% and you owe €24,330 in CGT.

This looks simple enough, but many people forget about exemptions, allowable costs, or even how indexation works. That’s where professional guidance becomes essential.

Reliefs That Can Reduce Your CGT Bill

Reliefs are one of the most important ways to reduce CGT liability. Here are the key ones you should know:

Principal Private Residence (PPR) Relief

If you sell your main home, you may not owe any CGT thanks to Principal Private Residence Relief. This applies if the property has been your primary residence throughout ownership. Even if you rented out part of it or were absent for a period, partial relief may still apply. The relief generally covers the house plus up to 0.4 hectares of gardens or grounds.

Indexation Relief

For assets acquired before 1 January 2003, the purchase price can be increased by an indexation factor published by Revenue. This recognises inflation over time. For example, if you bought a property in 1990, the purchase price for CGT purposes may be uplifted significantly, reducing the taxable gain.

Agricultural Reliefs

Farmers and landowners may benefit from reliefs that significantly reduce liability:

• Retirement Relief: Allows farmers over a certain age (generally 55) to transfer or sell business or farming assets without incurring CGT, subject to conditions
• Agricultural Relief (for Capital Acquisitions Tax) interacts with CGT: while it mainly reduces inheritance/gift tax, it also affects planning for future disposals
• Consanguinity Relief: In certain cases, transfers of agricultural land between family members may qualify for reduced or eliminated CGT

Retirement Relief (Non-Farming)

Even outside agriculture, individuals over 55 disposing of qualifying business assets may be able to claim retirement relief, which can reduce or eliminate CGT on those disposals.

Entrepreneur Relief

If you dispose of certain business assets, Entrepreneur Relief can reduce the CGT rate from 33% to 10% on gains up to €1 million. This is particularly valuable for small business owners selling their company.

Other Reliefs

• Transfers between spouses or civil partners: Always CGT-free, allowing couples to plan disposals tax-efficiently
• Relief on Certain Government Bonds: Some State securities are exempt
• Relief for Wasting Assets: Items such as cars or short-life assets are not chargeable

Edge Cases and Common Pitfalls

CGT gets complicated quickly because of the many exceptions. Some important pitfalls include:

• Forgetting to offset capital losses
• Not realising that selling crypto is a disposal subject to CGT
• Assuming an inherited asset is free from CGT (inheritance tax is separate; CGT applies when you sell the asset)
• Ignoring clearance certificate requirements (CG50A) for large property sales

Deadlines You Must Know

Unlike Income Tax, CGT has its own payment schedule:

• For disposals between 1 January and 30 November, payment is due by 15 December of the same year
• For disposals in December, payment is due by 31 January of the following year
• The tax return must be filed by 31 October of the year following the disposal

Missing these deadlines can result in penalties and interest, which is why proactive filing is so important.

Real-Life Scenarios

1. Selling an investment property: A couple sells their rental property, forgetting that legal fees and stamp duty on purchase can be deducted. They end up overpaying thousands without professional help
2. Disposing of shares: An investor sells €40,000 worth of shares, making a €30,000 profit. Without applying the €1,270 exemption, they pay too much CGT
3. Crypto boom and bust: A young professional cashes out €10,000 in crypto gains but doesn’t file a return. Revenue audits her and she faces penalties and interest on top of the CGT due
4. Inheritance case: A farmer inherits land and sells part of it. Agricultural and retirement relief apply, but without expert advice he risks triggering an unnecessary tax bill
5. Business owner exit: An entrepreneur sells her company. By applying Entrepreneur Relief correctly, she reduces her CGT rate from 33% to 10%, saving tens of thousands

These examples show how small oversights can have big financial consequences.

Why Use Irish Tax Hub?

With so many rules, reliefs, and deadlines, filing CGT yourself can be stressful. Irish Tax Hub’s CGT Review makes it simple and accurate:

• Full calculation of your liability, ensuring every exemption and relief is applied
• Preparation and filing of your CGT and Income Tax returns
• Fast three-working-day turnaround, so you won’t miss deadlines

Final Thoughts

Capital Gains Tax may look straightforward on the surface, but the reality is far more complex. Reliefs like Principal Private Residence relief, indexation, retirement relief, and entrepreneur relief can dramatically reduce what you owe – if applied correctly. Missing them could mean paying thousands more than necessary.

That’s why services like Irish Tax Hub’s CGT Review is so valuable. For a modest flat fee, you can rest assured your return is correct, your reliefs are maximised, and your deadlines are met. Whether you’re selling property, disposing of shares, realising crypto gains, or handling an inheritance, Irish Tax Hub is the smart choice for navigating CGT in Ireland.