Capital Gain Tax

Introduction

Finance Act 2003 introduced important changes to the due date(s) for payment of capital gains tax for disposals arising in 2003, as first announced by the Minister for Finance in last December’s Budget. Details of the revised dates were set out in earlier editions of Tax Briefing (Issue 51, page 4 and Issue 52, page, 12) and are repeated below. The purpose of this article is to remind practitioners of the revised due dates and to advise that we will shortly be embarking on an advertising campaign, including newspaper advertising and the production of a small leaflet, to alert all potential taxpayers to the earlier capital gains tax due dates for disposals in 2003. The changes to the due date for 2003 capital gains tax mean that some taxpayers will have to pay both their 2002 and 2003 capital gains tax on 31 October next as set out below.

Dates for Payment

Prior to the changes for 2003 capital gains tax was, in general, due 10 months after the end of the year of assessment. Thus for example, capital gains tax for the tax year 2002 is due on 31 October 2003. There is no change to this due date.

However, for disposals taking place in 2003 the due date has been brought forward to either:

• 31 October 2003 (for disposals between 1 January 2003 and 30 September 2003 inclusive, described as “the initial period”) or
• 31 January 2004 (for disposals between 1 October 2003 and 31 December 2003, described as “the later period”).

In future years the due date for payment of capital gains tax will follow the dates as set out below:

In addition to payment of capital gains tax due for the 2003 initial period, 31 October 2003 remains the due date for payment of capital gains tax liability on gains arising in the year 2002.

Making the payment

For income tax self-assessment taxpayers the Pay and File payslip attached to the personalised 2002 tax returns (Form 11, Form 11E and Form 1) caters for the payment of capital gains tax for 2002 and the 2003 “initial period”. Blank, or non personalised, capital gains tax payslips, for 2002 and “the initial period”, will be available for all other taxpayers for the capital gains tax liabilities due on 31 October 2003.

In addition, self-assessed and non self-assessed individuals will require a separate capital gains tax payslip for “the later period” due on

31 January 2004. Payslips will be available from the Collector-General’s office by phoning 1890 20 30 70, or from any Revenue office.

Capital Gains Tax return

The date for submission of the capital gains tax return has not changed. This remains 31 October in the year following the tax year in which the gain arose.

A PAYE taxpayer should make this return on a Form 12 or Form 12 Directors as appropriate, and a self-assessed individual should make the return on a Form 11 or Form 11E. Trusts and Estates should make the return on a Form 1. Individuals who are not required to make an income tax return, including non-residents, should make their capital gains tax return on a Form CG1.