Kimi450
commented
1 month ago Asking revenue for clarifications
Id also like some clarifications on the below:
"Acquisition of shares within 4 weeks of disposal: In this case, if a loss occurs on the initial disposal, then this loss can only be offset against a gain on the sale of shares of the same class which were purchased within 4 weeks of that sale."
The above seems to be a redundant clause as per my understanding. If losses occur on any disposal they are either carried forward and used to offset gains in that year. What is the reason to have a specific provision as mentioned above?
"2. Disposal of shares within 4 weeks of acquisition The FIFO rules do not apply to this 'bed and breakfast' transaction. Instead, the last in/first out ("LIFO") rule will apply so that the shares acquired within 4 weeks prior to the sale of shares of the same class are deemed to be sold first."
For the above, I would like to clarify if there would be a hybrid system in the case where part of the purchase was made for example 8 weeks ago and then some 2 weeks ago. And the sale touches shares from both instances, I presume up to the exent of the older shares, FIFO is applied and then for the applicable shares from 2 weeks ago LIFO applies? Or would it be that the shares from 2 weeks ago are treated as the sales first with LIFO and then the older shares apply with FIFO? Could you confirm that or clarify it further? (I do not understand the reason why this provision is in place as well but that is not relevant to my question above)
Need to add caveats as per below (mainly about aquisiations and disposal within 4 weeks)
Below snippet is from Revenue:
Specified Irish Assets Gains arising on the disposal of "specified Irish Assets" are always subject to Irish CGT. Specified Assets are: a) Land and Buildings in the State, including any interest in land such as leases; b) Minerals or any rights, interests or other assets in relation to mining or minerals or the searching for minerals in the State. Exploration or exploitation rights within the Irish Continental Shelf are also deemed assets situated in the State; c) Assets situated in the State, which were used, or acquired to be used, for the purposes of a trade carried on in the State; d) Unquoted shares deriving the greater part of their value from (a) or (b) - the greater part of their value is taken to be 50%.
If the assets being sold are Shares/Stocks/Cryptocurrencies Where the shares being disposed of are of the same class (e.g. ordinary shares) the general rule is that the first shares acquired are deemed to be the first sold (i.e. FIFO method - first in - first out). Unless:
Where an individual incurs a loss on disposal of shares, that loss can be deducted from chargeable gains in the same period. If the loss is greater than the chargeable gains, the remaining loss can be carried forward against future chargeable gains.
Return filing date Under the self-assessment system, it is the taxpayer's responsibility to file a return. The due date for filing a return of capital gains realised in a tax year is 31 October following the year of assessment in which the disposal occurs. Alternatively, a separate CGT return (Form CG1) can be completed.
Surcharge for filing a late return Where a taxpayer fails to submit details of chargeable assets disposed of in a tax year or submits an incorrect return, Revenue can impose a surcharge on the amount of CGT due. · Where a late return is filed within two months of the due date, a surcharge of 5% of the tax payable/paid, or €12,695, if lower, is applied. · Where the return is filed more than two months late, the surcharge is 10% of the tax payable/paid, or €63,485 if lower. This surcharge forms part of the CGT liability and is deemed due from the tax payment date.
Interest charged for late payment of tax In order to avoid interest charges the tax payment must be not less than 100% of the person's liability for the year of assessment.
Interest will be charged at 0.0219% per day or part of a day on the outstanding amount from the due date until the date full payment is made. Interest will be charged on the balance of tax due with effect from the due date: · If the tax payment has NOT been made by the due date; or · If the tax payment is LESS than the required amount.