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GAZETTE
JANUARY/FEBRUARY 1978
assets specified in paragraphs (a), (b) or (c) above
other than shares quoted on a stock exchange.
(e) Goodwill of a trade carried on in the State.
Paragraph 11 provides that upon payment of the
consideration for acquiring an asset to which the
paragraph applies "the person by or through whom any
such payment is made shall deduct thereout a sum
representing an amount of Capital Gains Tax on one-half
of the said payment at the rate of such tax in force at the
time the payment is made". As the rate of tax at present is
26%, the deduction required to be made is therefore 13%
of the total sum paid for acquiring the asset. The
obligation to make the deduction falls on any person
making the payment. The deduction will normally be
made by the purchaser's solicitor and if he fails to make
the deduction in a case where it ought to be made, he will
be personally liable for the amount which should have
been deducted.
The person making the deduction must forthwith
deliver to the Revenue Commissioners an account of the
payment and of the sum deducted therefrom, and the
Inspector of Taxes will then assess and charge that person
to Capital Gains Tax on an amount equal to one-half of
the payment. Payment to the Revenue Commissioners of
the sum deducted is a full discharge to the purchaser as if
the sum deducted had been actually paid to the person
making the disposal
Paragraph 11 does not apply, and the 13% deduction
need not be made, where the consideration on a disposal
does not exceed £50,000. However, where an asset was
at any one time owned by the one person and that person
disposes of it in parts either to die same person or to
persons who are acting in concert or who are connected
persons within the meaning of Section 33 of the Capital
Gains Tax Act, whether on the same or different
occasions, the several disposals are aggregated for the
purpose of determining whether the consideration exceeds
£50,000 and the deduction should be made.
Sub-paragraph (6) of paragraph 11 provides that a
person chargeable to Capital Gains Tax on the disposal of
an asset to which paragraph 11 applies may apply to the
Inspector of Taxes for a Certificate that tax should not be
deducted from the consideration. The Inspector is obliged
to issue the Certificate if he is satisfied that the applicant is
the person making the disposal and that —
(a) He is ordinarily resident in the State or
(b) No amount of Capital Gains Tax is payable in
respect of the disposal or
(c) The Capital Gains Tax chargeable for the year of
assessment in which the disposal is made and the
tax chargeable on any gain accruing in any earlier
year of assessment on a previous disposal of the
asset has been paid.
Unlike the other taxes described above, unpaid Capital
Gains Tax is not a charge on the property of the vendor.
Accordingly, where the consideration on a disposal does
not exceed £50,000 and there have been no other
disposals of part of the same asset to the same person or
to connected persons or persons acting in concert, then
the purchaser is not concerned at all with the vendor's
Capital Gains Tax or with the Capital Gains Tax of any
previous owner of the property. However, where the
consideration exceeds £50,000, the solicitor for the
purchaser should requisition a certificate that tax need not
be deducted from the payment of the consideration under
paragraph 11 of Schedule 4 to the Capital Gains Tax
Act.
It is important to note that a Certificate must be
obtained in all cases where the consideration exceeds
£50,000, regardless of whether the vendor is or is not
resident in the State. A Certificate that the deduction need
not be made will be readily forthcoming in a case where
the vendor is resident in the State, and the Certificate can
usually be obtained in a matter of days. However, it is for
the vendor to satisfy the Inspector of Taxes that he is in
fact resident in the State. Unless a Certificate is produced
by the vendor, the purchaser must make the 13%
deduction and account for it to the Revenue,
notwithstanding that he may be aware that the vendor is
in fact resident in the State.
The vendor obtains a Certificate by applying on form
CG50 to the Inspector of Taxes who normally deals with
his tax returns. The application gives details of the assets
disposed of, the date of the contract for sale, the tax
reference number of the person making the disposal and
the grounds of the application, e.g., that the person is
ordinarily resident in the State. If the Inspector of Taxes
is satisfied, he will then issue a form CG50A certifying
that the deduction need not be made.
Summary
The following Taxation Requisitions are necessary:
1. Where there is a death or other event giving rise to a
claim for Death Duties on the title prior to the 1st April
1975 and within twelve years preceding the sale
— Furnish Certificate of Discharge from Death
Duties.
2. Where there is a death on the title on or after 1st
April 1975 and within twelve years preceding the sale
— Furnish Certificate of Discharge from Capital
Acquisitions Tax (Inheritance Tax).
3. Where there is a Voluntary Disposition or a transfer for
less than full consideration on the title on or after 28th
February 1974 and within twelve years preceding the
sale — Furnish Certificate of Discharge from Capital
Acquisitions Tax (Gift Tax/Inheritance Tax).
4. Where
(i) the property was on 5th April 1975, 1976 or
1977 owned by an individual, Discretionary Trust
or Private Non-trading Company and
(ii) the sale or mortgage takes place within six years
after the relevant 5th April and
(iii) the consideration for the sale or the mortgage
debt (together with the consideration or mortgage
debt for any other such sale or mortgage between
the same parties within the two preceding years)
exceeds £50,000
— Furnish Certificate of Discharge from Wealth
Tax.
5. Where the consideration for the sale (together with the
consideration for the sale of other parts of the same
asset by the same vendor to the same purchaser or to
persons who are connected or are acting in concert)
exceeds £50,000 — Furnish Certificate that Capital
Gains Tax should not be deducted under paragraph
11 of Schedule 4 to the Capital Gains Tax Act 1975.
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