Commenting on CGT following the publication of the Finance Bill,

John Heffernan, Tax Partner at EY, said:

“With so much uncertainty surrounding the budget announcement of an amendment to the existing capital gains tax relief on disposals of land, the clarity provided through the Finance Bill today will come as great relief to those who invested with a view to realising their investment on its 7th anniversary.

“The reduction in the holding period from seven to four years should result in more residential land being released to the market. There have been suggestions that a number of investors who acquired residential land in Dublin in 2013 and 2014 have been holding back the land until 2020 and 2021 waiting for the seven-year holding period to expire to avail of the capital gains tax exemption.

“The Budget did not include any particular policies to support entrepreneurs, and there is nothing in the Finance Bill to change that. In particular there had been an expectation that the Minister would move to increase the € 1 million cap on the special 10% capital gains tax relief for entrepreneurs. This was not included in the budget and is not included in the Finance Bill.  The equivalent threshold in Northern Ireland and United Kingdom is £10 million.

“We would very much welcome a commitment from the Minister that progress will be made in next year’s Budget and Finance Bill to provide more support to entrepreneurs and to increase the capital gains tax cap to nearer the UK level.”

Article Published: 20/10/2017