John Perry (Sligo-Leitrim, Fine Gael)
Link to this: Individually | In context

Question 194: To ask the Minister for Finance if a person (details supplied) in County Sligo should have paid taxes on building society shares; and if he will make a statement on the matter. [17070/05]

Brian Cowen (Laois-Offaly, Fianna Fail)
Link to this: Individually | In context

A charge to capital gains tax arises in respect of chargeable gains accruing on the disposal of assets. Such gains are computed in accordance with the provisions of the Capital Gains Tax, CGT, Acts. The charge extends to individuals, companies and unincorporated bodies of persons. CGT has no connection with income, which is the basis for income tax.

The Revenue Commissioners inform me that, according to their records, the person referred to by the Deputy is an old age pensioner. I assume this is the basis for the Deputy's question. There is no provision in the Capital Gains Tax Acts to exempt individuals from capital gains tax on the basis that they are old age pensioners. Gains arising on the shareholdings of old age pensioners are liable to CGT in the same manner as gains arising to other individuals. Shares in the company concerned, First Active, were chargeable assets and the gain realised, on their sale for cash, is a chargeable gain in the hands of the shareholder.

I am advised by the Revenue Commissioners that, as many shareholders would not ordinarily be expected to be familiar with CGT provisions, they decided to write to each of them informing them of a potential tax liability arising from the disposal of the shares and how to make such payment. They have further advised me that the taxpayer concerned received such a letter, which set out an estimate of the amount of CGT due. The taxpayer has made the relevant payment to Revenue, which equates to a total of €304 from a total of €2,790 received from the sale of the shares. His CGT liability was calculated as follows:

The chargeable gain above can be reduced by any allowable losses arising in 2004 together with any unused allowable losses from disposals of assets chargeable to capital gains tax in any previous year.

The documentation that has been issued to the person referred to by the Deputy includes a special Revenue helpline number should any further assistance be required.