Capital Gains Tax (Amendment) Act, 1978

Reduced rate of charge by reference to period of ownership.

4.—(1) Notwithstanding section 3 (3) of the Principal Act, but subject to the provisions of this section, a person (not being a company) who is resident or ordinarily resident in the State and who makes, in the manner prescribed by the Capital Gains Tax Acts, a claim in that behalf and makes a return in the prescribed form shall, for the year 1978-79 and each subsequent year of assessment, be entitled, in respect of chargeable gains accruing to him on the disposal of an asset owned by him for a period of ownership of more than three years and not more than twenty-one years, to be charged at a reduced rate of tax for the year of assessment in which the disposal is made and such reduced rate shall be as follows, that is to say, if his period of ownership of the asset is—

more than 3 years and not more than 6 years

25.5 per cent.

more than 6 years and not more than 9 years

21.0 per cent.

more than 9 years and not more than 12 years

16.5 per cent.

more than 12 years and not more than 15 years

12.0 per cent.

more than 15 years and not more than 18 years

7.5 per cent.

more than 18 years and not more than 21 years

3.0 per cent.

(2) Assets shall not be chargeable assets where they are owned by a person, within the meaning of subsection (1), whose period of ownership thereof exceeds twenty-one years.

(3) (a) Subsections (1) and (2) shall not apply in respect of chargeable gains accruing on the disposal of—

(i) land in the State the consideration for the disposal of which exceeds what the market value of the land would be if, immediately before the disposal, it had become unlawful to carry out any development (within the meaning of section 3 (1) of the Local Government (Planning and Development) Act, 1963 ) in relation to the land other than development of the kinds specified in section 4 (1) of that Act;

(ii) minerals in the State or any rights, interests or other assets in relation to mining or minerals or the searching for minerals; or

(iii) exploration or exploitation rights in a designated area.

(b) References in paragraph (a) to the disposal of assets mentioned in subparagraphs (i), (ii) and (iii) of that paragraph include references to the disposal of shares deriving their value or the greater part of their value directly or indirectly from those assets, other than shares quoted on a stock exchange.

(4) Subsections (1) and (2) shall not apply where the amount chargeable to capital gains tax is an amount determined in accordance with section 4 (3) of the Principal Act.

(5) A claim under this section shall be made by notice in writing to the inspector given within two years from the end of the year of assessment in which the disposal is made or such longer period as the Revenue Commissioners may by notice in writing allow.

(6) This section shall apply to chargeable gains accruing to a qualifying unit trust, within the meaning of section 32 (inserted by the Finance Act, 1977) of the Principal Act, as if, in subsection (2) of that section, for the reference to section 3 (3) of that Act, there were substituted a reference to this section.

(7) Section 5 (1) of the Principal Act shall apply subject to the provisions of this section and of paragraph 7 of Schedule 1.

(8) In this section—

“designated area”, “exploration or exploitation rights” and “shares” have the same meanings as in section 4 (8) of the Principal Act;

“period of ownership”, in relation to a person making a disposal of an asset, means his period of continuous ownership of the asset, in the same capacity, ending with the date of such disposal, and, for the purposes of this definition, a period of ownership shall be determined without regard to the provisions of section 3 (2) and, where the asset was acquired by the person on the death of his spouse so that his period of ownership would, apart from this subsection, be treated as having commenced on the date of that death, his period of ownership shall be deemed to be extended to include his spouse's period of continuous ownership ending on that date.