CGT Change Means 250 Million Euro Windfall For Irish Government

by Caroline Maxwell, Tax-News.com, London

07 February 2003

The Irish government is set to receive a one-off revenue windfall of around 250 million euros as a result of a measure unveiled by Finance Minister, Charlie McCreevy on Thursday.

Currently, capital gains tax on transactions such as the sale of a house, or the cashing in of shares is paid the following year. However, under the new proposals, payments on gains made during the first nine months of the year must be received by October 31 of that year, and tax due on transactions during the final quarter of the year must be paid by the following January.

According to a report in the Irish Examiner, this change will earn the government an estimated 250 million euros this year. This figure will be supplemented by an additional 100 million euros a year for three years, which will be raised by imposing an unpopular banking levy on the Republic's financial institutions.

However, reports in the Irish media have suggested that the banks themselves are unlikely to feel the pain of the new levy, as they will almost certainly pass the additional costs onto their customers.

Mr McCreevy also announced yesterday that he intends to introduce a number of measures designed to crack down on tax evasion amongst the nation's wealthiest citizens, following reports from the Revenue Commissioners which suggested that many high-earning Irish citizens are paying only minimal tax bills.

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