The guidance seeks to ensure that civil partners are subject to the same rules as apply to married couples. It also sets out the rules for where a civil partnership is dissolved.
The guidance is set out in New Tax and Duty Manual (Part 44a-02-0).
Section 1031M of the Taxes Consolidation Act (TCA) 1997 provides that civil partners living together may nominate which partner is to be the assessable person for the purposes of CGT.
- The guidance states that the transfer of assets between the civil partners is treated as having been made on a "no gain, no loss" basis. Essentially this means that transfers between civil partners do not give rise to immediate capital gains tax consequences.
- The guidance confirms that allowable losses of one civil partner in a tax year may be offset against gains of the other civil partner.
- This is line with the rules set out for married couples in Section 1028 of the Taxes Consolidation Act, 1997.
- The guidance also sets out the capital gains tax rules for transfers of assets where a civil partnership is dissolved and assets are subsequently sold.
- The guidance states that where either civil partner disposes of an asset to the other civil partner, that disposal is also treated as having been made on a "no gain, no loss" basis."
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This is the case where an order is made either under:
• Part 12 of the Civil Partnership and Certain Rights and Obligations of Cohabitants Act 2010, or following the granting of a decree of dissolution; or
• Where an order is made under a deed of separation, agreement, arrangement, or any other act giving rise to a legally enforceable obligation.
These rules mirror those on the separation of married couples in Section 1030 of the TCA.
There are exceptions to the rules in both cases.
The treatment described above in both cases does not apply in circumstances where the civil partner acquiring the asset could not be subject to CGT in Ireland, in respect of a gain on a subsequent disposal of that asset in the year in which the acquisition took place.
In addition, the guidance provides that any subsequent disposal by the civil partner who acquired the asset is treated as if that civil partner had acquired it at the same time and cost at which it was originally acquired by the other civil partner. In both cases, the relief does not apply to trade stock.