CGT Relief on Transfers Between Spouses and Civil Partners

When navigating the world of Capital Gains Tax (CGT) in Ireland, one relief that couples often overlook is the exemption on transfers between spouses and civil partners. While reliefs like Entrepreneur Relief and Retirement Relief often grab the headlines, the spousal transfer exemption can quietly deliver significant tax savings for thousands of families every year.

At Irish Tax Hub, we see time and time again how couples miss out on this valuable opportunity simply because they don’t know it exists - or they fail to structure their assets properly to take full advantage. In this article, we’ll explain everything you need to know about CGT relief for spousal transfers in Ireland, why it’s so powerful, and how to use it strategically in your tax planning.

What is Capital Gains Tax (CGT) in Ireland?

Before diving into reliefs, let’s refresh the basics.

• Capital Gains Tax is a tax on the profit (gain) made when you sell, gift, or dispose of an asset.
• The standard CGT rate in Ireland is 33%, which means that for every €10,000 in gains, you could owe €3,300 to Revenue.
• Certain disposals are taxed differently (e.g., some offshore funds at 40%, or 10% if Entrepreneur Relief applies).

Assets commonly subject to CGT include:

• Investment properties
• Shares and securities
• Business assets
• Land and development sites
• Other valuable assets like artwork, crypto, and intellectual property

Given how broad the net is, it’s easy to see how CGT can become a major financial burden without proper planning.

Spousal Transfers and CGT: The “No Gain, No Loss” Rule

So where do spousal transfers come in?

Under Irish tax law, when you transfer an asset to your spouse or civil partner (living together), the transfer is deemed to happen at “no gain, no loss.”

This means:

• No CGT is triggered at the time of transfer.
• The receiving spouse takes on the original cost, acquisition date, and base value of the asset.

Example:
John bought an investment property in 2010 for €200,000. By 2025, it is worth €400,000. If John sells, his gain is €200,000, and he owes €66,000 CGT.

But if John transfers 50% of the property to his wife, Mary, before the sale:

• John and Mary can each use their €1,270 annual exemption.
• They may be able to share losses, access reliefs, or structure ownership more efficiently.
• When the property is sold, the gain can be split, often reducing the total CGT payable.

Why Spousal Transfer Relief is So Valuable

Here’s why this CGT exemption is more than just a nice perk—it’s a key tax strategy:

1. Double Up on Annual CGT Exemptions

Each person gets a €1,270 CGT exemption per year. A couple can therefore shelter €2,540 in gains annually just by structuring ownership properly.

2. Unlock Other Reliefs

Some reliefs are personal, meaning they apply only to the asset owner. For example:

• Entrepreneur Relief: 10% CGT up to €1 million in lifetime gains.
• Retirement Relief: CGT exemption on disposal of business/farm assets after age 55.

By transferring assets, couples can ensure the partner who qualifies best for relief holds the asset at the time of disposal.

3. Reduce Exposure to Higher CGT Bills

Couples can balance ownership so gains are spread across two taxpayers. This can be especially powerful where one spouse has unused losses to offset gains.

4. Estate and Succession Planning

Spousal transfers form the backbone of efficient estate planning. Structuring assets between spouses before passing them to children can lead to significant tax savings, both in CGT and Capital Acquisitions Tax (CAT) later on.

When Should You Consider a Spousal Transfer?

Some common real-life scenarios where couples benefit from spousal CGT relief include:

• Selling an Investment Property: Before selling, transfer part ownership to a spouse to share gains and exemptions.
• Business Disposal: If one spouse qualifies for Entrepreneur Relief but the other doesn’t, restructure ownership in advance.
• Share Portfolios: Shift shares between spouses to use both sets of allowances and losses.
• Retirement Restructuring: Transfer assets to ensure the right spouse qualifies for Retirement Relief thresholds.

Key Conditions to Watch Out For

While this relief is generous, it does come with conditions:

1. You must be married or civil partners and living together at the time of transfer.
2. Transfers between separated spouses (legally or permanently) do not qualify.
3. The receiving spouse inherits the original cost—so CGT is only deferred, not erased.
4. Revenue may scrutinise arrangements that appear to be purely artificial or tax-driven. Documentation and advice are crucial.

How Irish Tax Hub Helps Couples with Spousal CGT Relief

At Irish Tax Hub, we help individuals and families across Ireland minimise their Capital Gains Tax liability. Our services are tailored to ensure that you not only comply with Revenue requirements but also use every relief available to your advantage. We handle your CG1 or Form 11 filings, ensuring deadlines and payments are never missed.

By working with us, you won’t just avoid tax pitfalls - you’ll actively save money through strategic planning.

Frequently Asked Questions (FAQs)

Q1: Do I pay CGT if I transfer property to my wife/husband in Ireland?
No. Transfers between spouses/civil partners living together are exempt from CGT.

Q2: Can I transfer shares to my spouse tax-free?
Yes. The same exemption applies to shares, funds, and most other assets.

Q3: What happens if my spouse later sells the asset?
They are treated as if they originally bought it at your cost and date. CGT will then apply based on that history.

Q4: What if we are separated or divorced?
The relief does not apply to permanently separated or divorced couples. Different rules may apply in divorce settlements.

Q5: Can this help reduce inheritance tax?
Indirectly, yes. While this is a CGT relief, spousal transfers can help structure your estate before assets pass to children, reducing future Capital Acquisitions Tax (CAT).

Conclusion

The CGT relief on transfers between spouses and civil partners in Ireland is one of the simplest yet most powerful tax planning opportunities available. From doubling up exemptions to unlocking valuable reliefs like Entrepreneur Relief and Retirement Relief, this exemption should be part of every couple’s tax strategy.

Far too often, we meet clients who only discover these benefits after a sale has already happened - by then, it’s too late to restructure.

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