Revenue Tax Briefing

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Revenue Tax Briefing Issue 52, May 2003

Finance Act 2003 – Capital Gains Tax

Section 67 amends Part 19 TCA 1997 in four separate Sections

  • Section 591 (relief for individuals on certain reinvestment)
  • Section 597 (replacement of business and other assets)
  • Section 600A (replacement of qualifying premises), and
  • Section 605 (disposal to an authority possessing compulsory purchase powers)

Each of these sections allowed the deferral of a capital gains tax charge on gains accruing on the disposal of certain assets (“old assets”) where the consideration for their disposal is reinvested in certain other assets (“new assets”). Section 67 implements the Budget announcement that such deferrals are not available for disposals on or after 4 December 2002. However, any capital gains arising on the disposal of “old assets” which, under these sections, have been deferred on the acquisition of “new assets” before that date, can continue to be deferred so long as the consideration for the disposal of the “new assets” continues to be reinvested in other permitted assets. The gain on the disposal of the “new assets” themselves cannot, however, be deferred. Furthermore, as respectsSections 597, 600A and 605 where “new assets” were acquired before 4 December 2002, with the intention of disposing of the related “old assets”, but the owner had not disposed of those related “old assets”, by Budget day, the gain on the disposal may still be deferred so long as the disposal of those related “old assets” takes place on or before 31 December 2003