Confusion has arisen regarding changes to capital gains tax (CGT) in the Budget. An individual who is resident or ordinarily resident in Ireland is liable to CGT on "chargeable gains" made on the disposal of assets regardless of where the assets are situated. This Budget change means residents who dispose of assets anywhere in the world are liable for CGT in Ireland. PricewaterhouseCooper's Ms Anne Bolster says: "Chargeable assets include all forms of property, land and buildings, stocks and shares, options, certain debts and currency other than Irish currency."

They do not generally include an individual's main residence, cars, personal property or goods with a predictable life of 50 years or less and certain Government fixed-interest securities.

In order to create a CGT charge there must be disposal of an asset which was owned prior to the disposal. A disposal takes place whenever ownership of an asset changes, such as when it is sold or given as a gift.

There are a few main exemptions and reliefs from CGT. An annual exemption of £1,000 (€1,270) is allowed per individual and may not be transferred between spouses.

The gain on the disposal of an individual's principal private residence is exempt but certain restrictions may apply where the residence has development potential. A dwelling which was occupied rent-free by a dependent relative is exempt from CGT on the gain from its disposal.

Retirement relief from CGT is available in certain circumstances. Family Money reader Mr M e-mailed us concerning capital tax in the Budget and particularly the exemption for those aged over 55 disposing of property more than 10 years old. He asks if this refers only to physical property or do shares qualify?

Ms Bolster believes our reader is discussing retirement relief on business assets, which is the only exemption available to those over age 55. In this case, assets may be property, shares or anything of value belonging to the individual's business.

Retirement relief is only available on the disposal of business assets owned for 10 or more years by an individual aged 55 or more. The disposal of a business by a qualifying individual to a child is exempt from CGT. A child includes a niece or nephew who has worked in the business substantially or on a full-time basis for the previous five years. An individual is not required to retire when availing of this relief, despite the name.

Budget 2000 increased the limit for capital gains tax retirement relief for businesses sold outside the immediate family from £250,000 to £375,000 "so as to encourage the transfer of business assets to younger entrepreneurs".

The capital gains tax rate for development land for non-residential purposes was reduced from 40 to 20 per cent.

CGT is determined on a self-assessment basis. An individual must calculate the tax due and make payment by November 1st in the year after the disposal was made. If a person disposes of an asset during the 1999/2000 tax year which is liable to CGT, the tax is due for payment on November 1st, 2000. The 1999/2000 tax return must be filed by January 31st to avoid interest or penalties payments.