February 16, 2011
By Staff Reporter
By Pat Duffy
My father died in Ireland in the early 1970s. When he died he left me some property, a shop with an apartment overhead. I now want to sell it. Since the property is located in Ireland, will I incur capital gains tax in Ireland and, if so, at what rate? — POS, NYC
Capital gains tax was introduced into the Irish tax system on April 5, 1974. Properties bought and sold since that time have been subject to capital gains tax. The present rate of capital gains tax in Ireland is 20 percent. This rate is assessed on what is called the "taxable gain," which is not necessarily the same as the profit.
When the Irish government introduced capital gains tax, they also tied the purchase price to an index factor which in 1974-75 was 6.112. They also allow an annual exemption of 1,000 punts.
You indicate your father passed the property to you in the early 1970s. I’m not sure what early means but any gain between the time it was passed and April 5, 1974 can be ignored since capital gains did not exist at that time. What needs to be determined is the market value on April 5, 1974. This is the starting off point.
So let us see how your situation might work out. You will have to use your own actual figures. Mine are "just supposing" figures.
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Suppose:
Selling Price 100,000
Minus
Cost of Property