As of 1 October 2026, Revenue Commissioners guidance confirms that disposing of a property to a connected person (including a parent, child, or sibling) at less than market value triggers a capital gains tax (CGT) charge based on the open market value at the date of disposal, not the actual consideration received. This anti-avoidance rule under Section 580 TCA 1997 applies irrespective of whether the transaction is a gift or a sale. The market value must be substantiated by a qualified valuer’s report. The annual CGT exemption of €1,270 and allowable deductions (acquisition cost, enhancement expenditure, disposal costs) remain available. Failure to declare the deemed gain by the 31 December following the tax year incurs surcharges and interest.
Key Takeaways
- Deemed Market Value: CGT is calculated on the property’s open market value at disposal date, not the discounted price paid by the family member.
- Connected Persons Scope: The rule covers spouses, civil partners, relatives (ancestors, descendants, siblings), and trustees of settlements where the settlor is connected.
- Compliance Obligations: A Form CG1 must be filed and tax paid by 15 December of the year following disposal; late filing attracts a 5% surcharge capped at €12,695.
Disclaimer: This article is compiled and summarized by the AI based on publicly available information and is for general information purposes only. It does not constitute any form of formal tax advice, legal opinion, or basis for performance. Please consult a qualified professional tax advisor or legal counsel for tax advice.
Source: Read Official Announcement