There is a Capital Gains Tax relief for properties acquired between 7 December 2011 and 31 December 2014 and then held for seven years. On disposal after the 7 year period any gain is relieved from CGT. The CGT relief works on a time-apportionment basis.
For example if a property is sold after exactly 7 years then the gain is fully relieved, if a property is sold after 10 years then 7/10 of the CGT gain is relieved and 3/10 of the gain is taxable.
Where a company owns property that it acquired before 7 December 2011 there is an opportunity now to restructure the property holding within the corporate group to avail of the relief on a future disposal.
Company A bought a property for €500K in 2002. It is now worth €1m. In 2021 it will be worth €1.5m. Where no action is taken then on sale in 2021 the gain of €1m will be subject to CGT.
Where the property is, before 31 Dec 2014, transferred intra-group (i.e. to parent or subsidiary of Company A) and held for 7 years post transfer then the gain on disposal in 2021 may (subject to review and provision of formal advice in respect of any particular case) be fully relieved from CGT, even though the original acquisition within the group was pre-7 Dec 2011 and part of the gain is derived from the pre-7 Dec 2011 period.
The current intra-group transfer of the property is tax-free (normal group reliefs from Stamp Duty and CGT).
If you are interested in finding out more about this CGT Relief contact Dylan Byrne, Director OSK.
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