Capital Gains Tax following Separation/Divorce in Ireland

Information

Capital Gains Tax

Capital Gains Tax (CGT) is a tax on the profit made on the disposal of any asset and is payable by the person making the disposal. Disposal can be by way of gift or sale. Transfers of assets between spouses are exempt from capital gains tax. Transfers of assets between spouses who are separated are exempt from capital gains tax if they are made under a Separation Agreement or a court order.

From the date that the separation is likely to be permanent, any transfer of assets between spouses is not exempt from capital gains tax.

Similarly transfers of assets between spouses pursuant to a court order in a Divorce Decree are exempt but transfer of assets subsequent to the granting of the Decree that are not ordered by the court are not.

Separating couples should always seek specialist tax advice before entering into arrangements that have capital gains tax implications.

Capital Acquisitions Tax

Capital Acquisitions Tax (CAT) is a tax on gifts and inheritances received by a person. The person receiving the gift or inheritance pays the tax. The tax is paid on the open market value of the asset being received. Transfers of assets between spouses whether by way of gift or inheritance are exempt from capital acquisitions tax. Separation does not affect this exemption but divorce does. Transfers of assets pursuant to a court order in a Divorce Decree are exempt but transfers of assets subsequent to the granting of the Decree of Divorce that are not ordered by the court are not.

Separating couples should always seek specialist tax advice before entering into arrangements that have capital acquisitions tax implications. Read more about Capital Acquisitions Tax here.

Stamp duty

Stamp duty is a tax most often associated with the transfer of property whether by way of gift or sale. Transfers of property between spouses are exempt from stamp duty. Transfers of property between spouses who are separated or divorced are exempt from stamp duty if they are made pursuant to a court order.

There is more information on stamp duty here.