Capital Gains Tax (CGT) Calculator.

Capital Gains Tax (CGT) is a tax on any profit you make when you dispose of an asset. It only concerns the amount you gain, meaning it does not apply to the price you initially paid for the asset, nor for any expenses you incurred in developing it. 

For example, if you purchase a house for €100,000, spend €40,000 renovating it and sell the asset for €200,000, you will be subject to CGT on your gain of €60,000.  

Anything of value that can be converted into cash is considered an asset. You can dispose of an asset by:

• Selling it.
• Exchanging it. 
• Giving it away as a gift. 

Receiving insurance compensation for it.

The standard rate of Capital Gains Tax in Ireland is 33%.

This can fluctuate slightly when you dispose of certain foreign life assurance policies and for some windfall gains. 

Deductible or allowable expenses from CGT are:

• Money spent to increase the asset’s value. 
• Money spent acquiring and disposing of the asset.

Capital Gains Tax does not apply to the first €1,270 of taxable gains you earn in a tax year.

The CGT calculator is based on:

1. The current market value of your asset – how much it is deemed to be worth at the time of disposal.
2. The purchase price of your asset – how much you paid for the asset. 
3. Any expenses you incurred – any costs involved in the maintenance or improvement of the asset. 
4. The CGT threshold – set by the government in the budget but is not subject to much fluctuation. 

The taxable amount is then calculated as:

Market Value – Purchase Price – Expenses Incurred – CGT Threshold = Taxable Amount on which you will be charged 33%.

CGT applies to inherited assets if and when you dispose of them. Generally, there is no Capital Gains Tax due upon acquisition of an asset transferred in death.

You are deemed to be the owner of the asset upon the date of the previous owner’s death.

Returns earned from pension schemes are generally exempt from Capital Gains Tax. Because of this, they can represent particularly lucrative financial plans. 

If you choose to cash in your pension early for example, you can access a 25% tax free lump sum. 

By not having to pay CGT, assets in pension funds can grow faster.