Financial Resolution No. 7 increases the rate of capital gains tax applicable to the disposal of other assets from 22% to 25%. It applies to disposals made on or after 8 April 2009. It is estimated that the additional yield arising from the budget proposal will be in the order of €30 million this year and the full year yield is expected to be in the region of €45 million. It will be appreciated that it is difficult to accurately determine the effects of a rate increase in Exchequer receipts because of declining asset valuations and a decrease in the number of transactions. There is a degree of confidence that the rate increase will not determine disposals, however. Capital gains on the disposal of an asset constitute an important source of income to the owners of these assets and as such these individuals must be expected to contribute to the requirement to raise additional revenue for the Exchequer at a time of serious pressures on the public finances.

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