Credit for CGT against Gift tax

Credit for Capital Gains Tax (CGT)

If CGT and CAT (aka Gift tax) are due on the same event and on the same property, you may be entitled to a tax credit.

The CAT payable by the beneficiary may be more or less than the CGT paid by the disponer. This is because the methods for calculating CAT and CGT are different.

For example:

Jimmy gives a gift of shares to Bill. Total CAT on the gift is €1,000 payable by Bill. And Jimmy is liable also to CGT on the gift of the shares for €400.

Bill can claim a credit of €400 for the CGT paid by Jimmy against his CAT bill of €1,000 leaving a balance payable of €600

However there is clawback condition in that if you sell the gift such as if Jimmy sold the shares within 2 years then the CGT credit is repayable

Any queries on the above give me a call on 091 763817 or email me at oliver@taxreturnhelp.ie