CGT on compulsory purchase

[Magillagorilla]

Is it correct that CGT at 33% must be paid on compensation received for compulsory purchase? Should the level of compensation reflect this? Thanks.

 

[ClubMan]

Yes. But not on the compensation received but on any chargeable gain.

Compulsory Purchase Orders

Compulsory Purchase Orders Dáil Éireann Debate, Tuesday - 15 June 2021

www.oireachtas.ie

I don't understand what you mean by "Should the level of compensation reflect this?".

 

[Horatio]

I'm not familiar with the CPO mechanics but are there 2 payments made?
1 for purchase on which CGT would be chargeable & 1 for compensation on which income tax would be chargeable?

 

[T McGibney]

Is it correct that CGT at 33% must be paid on compensation received for compulsory purchase? Should the level of compensation reflect this? Thanks.

Depends on whether or not it's in respect of a chargeable asset (eg not a PPR) and/or whether the recipient can claim a relief such as Retirement Relief.

 

[Magillagorilla]

Yes. But not on the compensation received but on any chargeable gain.

Compulsory Purchase Orders

Compulsory Purchase Orders Dáil Éireann Debate, Tuesday - 15 June 2021

www.oireachtas.ie

I don't understand what you mean by "Should the level of compensation reflect this?".

Suppose the end of a person's back garden(family home) needed to be cpo'd for the Dart West. If the home was being sold there would be no cgt. CPO compensation is calculated on the current value of the land. It seems that the owner would be at a loss if he/she had to pay 33% of any compensation to Revenue.

 

[Magillagorilla]

Thanks for the replies. My query referrred to a PPR so CGT was not an issue. TMcGibney has drawn this to my attention.

 

[T McGibney]

Deleted - posts crossed.