Here’s a concise overview for Irish Capital Gains Tax (CGT):
1. What is a “disposal”?
A disposal is any event where ownership or rights in an asset are given up or transferred. Common examples:
- Sale of an asset
- Selling land, buildings, shares, crypto, business assets, etc.
- Gifts
- Giving an asset away (for no consideration) is a disposal for CGT.
- Exchanges / swaps
- Swapping one asset for another is a disposal of the asset given up.
- Part‑disposals
- Selling or giving away part of an asset (e.g. selling part of a site, part of a shareholding).
- Disposal of business/farm assets
- On retirement, cessation or restructuring, disposals can arise.
- Cessation of a source of income
- May indicate a disposal of the underlying asset (e.g. sale of a rental property when rental income stops).
- Transfers between spouses/civil partners
- These are generally treated as no gain/no loss disposals, but still “disposals” for identification and base‑cost rules.
Revenue guidance stresses that all available information should be considered to see if a disposal has taken place; gifts and exchanges are explicitly disposals.
2. Events treated as (deemed) disposals
Some events are treated as disposals for CGT purposes even though nothing is actually sold.
Key “deemed disposal” situations:
- Receipt of a capital sum
- Compensation for damage or injury to an asset.
- Consideration for the use or exploitation of an asset (e.g. certain lump‑sum licence payments).
- Exit tax / migration of a company
- Under exit tax rules, a company may be deemed to dispose of and reacquire assets at market value when it becomes non‑resident or moves assets/activities abroad.
- Capital losses on these deemed disposals can be offset against exit‑tax gains (and carried forward).
- Offshore funds – 8‑year deemed disposal
- A person holding a material interest in an offshore fund is deemed to dispose of, and immediately reacquire, that interest at market value on the 8th anniversary of acquisition and every 8 years thereafter.
- This triggers an exit tax charge on the gain (market value less original cost).
- Other statutory deemed disposals
- Certain provisions deem a sale and immediate reacquisition at market value on a specified date (for example, to “re‑base” an asset or trigger a charge).
- In such cases, the law treats the event as a disposal without any incidental costs (no deduction for notional legal/agent/stamp duty costs).
3. Why it matters
- A chargeable gain (or loss) generally arises on both actual disposals and deemed disposals.
- You compute the gain as:
Proceeds/Deemed Proceeds − Allowable Cost − Allowable Expenditure
- Deemed disposals often reset the base cost to current market value for future CGT calculations.
If you tell what type of transaction you’re dealing with, a specific yes/no on whether it’s a disposal (or deemed disposal) and how to compute the gain can be given.
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