Paschal Donohoe (Dublin Central, Fine Gael) | Oireachtas source

I move amendment No. 75:

In page 93, between lines 2 and 3, to insert the following: “Amendment of section 604 of Principal Act (disposals of principal private residence)

37. Section 604 of the Principal Act is amended by the insertion of the following subsection after subsection (14):

“(15) (a) This subsection applies where an individual disposes of or of an interest in an asset (being an asset within subsection (2) or (11)) by way of a lottery or game with prizes and the proceeds of the lottery or game exceed the market value of the asset on the date of the disposal.

(b) Where this subsection applies, the consideration for the purposes of computing any chargeable gain accruing on the disposal referred to in paragraph (a) shall be the whole of the proceeds of the lottery or game referred to in paragraph (a) or, where there is more than one prize, so much of those proceeds as are referable to the asset referred to in paragraph (a).

(c) Where—

(i) a gain accrues to an individual on a disposal referred to in paragraph (a), and

(ii) apart from this subsection relief would be given under this section in respect of the disposal referred to in paragraph (a),

then that relief shall be given in respect of the gain only to the extent (if any) to which such relief would be given if, in computing the chargeable gain accruing on the disposal, there were excluded from the computation—

(I) the amount by which the consideration for the disposal of the asset exceeds the market value of the asset on the date of the disposal, and

(II) such proportion of the incidental costs to the individual of the disposal as would be referable to the amount referred to in clause (I).”.”.

Section 37 amends section 604 of the Taxes Consolidation Act 1997, which provides for relief from capital gains tax on the disposal of a principal private residence. The purpose of the amendment is to ensure that, where an individual disposes of an interest in a property that qualifies for principal private residence relief by way of a lottery or game with prizes and the proceeds of such lottery or game exceed the market value of that property, the maximum amount of the gain to which principal private residence relief may apply is that computed by reference to the market value of the property at the date of disposal and not by reference to the full proceeds received on foot of the lottery or game. The costs of disposal are similarly apportioned for the purpose of claiming the relief. In this way, the relief is restricted to the amount that the individual disposing of the property would have received if he or she had sold the property on the open market rather than by lottery or game with prizes, and any amount that the individual receives over and above the market value is subject to capital gains tax in the normal way.