Capital Acquisitions Tax Consolidation Act 2003 section 104

Allowance for capital gains tax on the same event

Section 104 provides that where both capital gains tax (CGT) and capital acquisitions tax (CAT) arise on the same property as a result of the same event, the CGT paid may be credited against the CAT liability, subject to a clawback if the asset is disposed of within two years.

• Where the same event triggers both CGT and CAT on the same property, CGT paid can be offset as a credit against the CAT, but cannot be deducted in computing the taxable value of the gift or inheritance.
• The credit for each asset is limited to the lesser of the CGT attributable to that asset or the CAT attributable to that asset — any apportionment required must be made on a just and reasonable basis.
• The CGT credit is clawed back to the extent that the asset is disposed of within two years of the date of the gift or inheritance, but this clawback does not apply where the disposal arises from the encashment of a life assurance policy that cannot be retained for the two-year period.
• A transfer of an asset from a transferor company to a successor company as part of a merger or division under Part 9, Chapter 4 of the Companies Act 2014 is not treated as a disposal for clawback purposes.