Taxes Consolidation Act 1997 section 981

Payment by instalments where consideration due after time of disposal

Section 981 allows a taxpayer to pay capital gains tax by instalments where the sale proceeds for a chargeable disposal are themselves receivable by instalments over a period exceeding 18 months, and immediate payment of the full tax liability would cause undue hardship.

• Where sale proceeds are payable by instalments over more than 18 months, the taxpayer may apply to Revenue to pay the CGT or corporation tax in instalments rather than in a single lump sum.
• The taxpayer must demonstrate to Revenue that paying the full tax immediately would cause undue hardship, having regard to the resources made available by the transaction rather than the taxpayer's overall wealth.
• Revenue may permit the tax to be spread over a period of up to five years, but the final tax instalment must be paid no later than the date the last sale proceeds instalment falls due.
• The relief does not apply where the vendor receives the full sale price at completion and separately lends money back to the purchaser, even if repayment of that loan is spread over time — these are two distinct transactions, not a single instalment arrangement.