Almost nine in 10 taxpayers agree capital gains tax rules should be overhauled

Almost nine in 10 taxpayers in Ireland feel that tax return rules around property sale profits should be overhauled, according to a new survey.

A sentiment survey of more than 2,000 taxpayers has found that 88 per cent would like to see the rules changed or simplified.

The survey conducted by tax return service provider Taxback comes in advance of the January 31st deadline for capital gains tax (CGT) owed on profits made last month.

In Ireland, any CGT due on profits made from the sale of a property (other than a principal residence) between January 1st and November 30th must be paid on or before December 15th in the same year the property is sold (although it is usually the following year that any profits made from the sale are declared in a tax return).

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However, for profits made between December 1st and 31st, CGT is due on or before January 31st of the following year.

Some 57 per cent of taxpayers surveyed agreed that the rules are an “example of Ireland’s unnecessarily complicated tax system” and should be simplified.

A further 31 per cent said the rules around CGT returns should be changed, so that any CGT due from the sale of the property is paid in the same year as any profits made from that sale are declared in a tax return.

Just 12 per cent of respondents said the system should not be changed.

Commenting on the survey results, consumer tax manager with Taxback Marian Ryan said the deadlines for CGT returns are “confusing” and people “could easily get caught out”.

She added that many people are unaware they still need to file a CGT return for the sale of a family home to claim the tax exemption for the primary residential property.

“Taxpayers could incur penalties and interest if they fail to comply with the rules around CGT, yet, those rules are not easy to follow,” she said, adding that there is a “strong case” for simplification of the rules around CGT returns and payments.

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