Taxes Consolidation Act 1997 section 978

Gifts: recovery of capital gains tax from donee

Section 978 sets out the rules under which a donee who receives a gift may be assessed for capital gains tax left unpaid by the donor in respect of the chargeable gain arising on that gift.

• Where a donor disposes of an asset by way of gift and fails to pay the resulting CGT within 12 months of the due date, Revenue may assess the donee for the unpaid tax, provided the assessment is raised within two years of the due date
• The amount charged on the donee cannot exceed the lesser of the chargeable gain on the disposal and the amount of CGT remaining unpaid by the donor
• Where only part of the disposal proceeds is gifted, the donee is liable only for a proportionate share of the unpaid tax; where there are multiple donees, each is liable in proportion to the share of the gift received
• A donee who pays CGT under this section may recover that amount from the donor as a simple contract debt, unless the terms of the gift require the donee to bear the tax