Capital Gains Tax Act, 1975

• Permanent Page URL

Capital gains accruing to an individual: alternative charge.

6.—(1) Subject to the provisions of this section, an individual shall, in respect of any year of assessment for which he was resident or ordinarily resident in the State be entitled to an adjustment of his capital gains tax for that year of assessment.

(2) The adjustment shall be such as to secure that the amount of capital gains tax to which he is chargeable for that year of assessment shall not exceed the further amount of income tax to which he would be chargeable if, in addition to any other liability to income tax, he was chargeable to income tax for that year under Case IV of Schedule D—

(a) where the amount on which he would, but for this subsection, have been chargeable to capital gains tax for that year under section 5 does not exceed £5,000, on a sum equal to one-half of that amount, and

(b) where that amount exceeds £5,000, on a sum equal to £2,500 plus the excess of that amount over £5,000.

(3) That amount of income tax shall be arrived at on the assumption that the income to which the individual would be so chargeable to income tax—

(a) is not available for set off under any of the provisions of the Income Tax Acts against any loss, or against any payments which may be made out of profits or gains brought into charge for tax, and is not available for the purpose of any other relief under the Income Tax Acts other than the personal reliefs, and for this purpose it shall be assumed that all such provisions of the Income Tax Acts are applied without regard to the income so chargeable under Case IV of Schedule D, and

(b) is to be treated as the highest part of the individual's income for the year, notwithstanding any provision of the Income Tax Acts directing other income to be treated as the highest part of the individual's total income.

In this subsection “personal reliefs” has the same meaning as in section 193 of the Income Tax Act, 1967 .

(4) The provisions of this section shall not affect the provisions of section 5 as to the circumstances in which an allowable loss accruing in one year may be deducted from chargeable gains accruing in any other year.

(5) If capital gains tax is chargeable under section 5 in respect of chargeable gains accruing to a married woman who in the year of assessment is a married woman living with her husband, then, whether or not the husband is chargeable to capital gains tax for that year of assessment under the said section 5, and whether or not the married woman is separately assessed to income tax—

(a) in determining the adjustment, if any, to be made under subsection (2), account shall be taken of income tax chargeable on the husband as well as of income tax chargeable on the woman,

(b) the reference to the individual's income in subsection (3) (b) shall be a reference to the husband's income including income of his wife which under the Income Tax Acts is deemed to be his income,

(c) if both the married woman and her husband are chargeable to capital gains tax for that year of assessment, the adjustment under subsection (2) shall be by reference to the sum of the capital gains tax so chargeable on them under section 5, and the further amount to which the husband would be chargeable to income tax if, in addition to any other liability to income tax, he was chargeable to income tax for that year of assessment under Case IV of Schedule D shall be computed—

(i) where the aggregate amount to which he and his wife would, but for subsection (2), have been chargeable to capital gains tax for that year under section 5 does not exceed £5,000, on a sum equal to one-half of that amount, and

(ii) where that aggregate amount exceeds £5,000, on a sum equal to £2,500 plus the excess of that aggregate amount over £5,000, and

(d) account shall be taken of the provisions of section 13 (3) and, where applicable, the proviso to that subsection and any reduction in capital gains tax effected by paragraph (c) shall be apportioned to the husband and wife in proportion to the respective amounts on which they would, under the said section 5, be chargeable to capital gains tax for the year of assessment.

(6) Any chargeable gain which accrued to an individual in a year of assessment on the disposal of an asset which the individual acquired (otherwise than as legatee) not more than two years before the disposal from a person who, in the terms of section 33, was a person connected with the individual shall be left out of account for the purposes of this section, and—

(a) capital gains tax shall be charged on the amount of that chargeable gain in accordance with the foregoing provisions of this Act,

(b) no loss shall be deductible under section 5 (1) or 13 (3) from that amount if relief is given under this section in respect of any other chargeable gain which accrued to the individual or, in accordance with subsection (4), to the husband or wife of the individual, in the said year of assessment.