Capital Gains Tax

Revenue are very efficient. I don't think he's in the poo for contemplating it tho.

stevo838383 wrote: »

I don’t want to pay CGT

Nobody wants to pay ant tax.

But do you want Gardai, nurses, hospitals, teachers?

Do you want State Pensions?

Do you want Child Benefit?

stevo838383 wrote: »

With all due respect I already pay a significant amount of tax with my job. I think it’s horse**** that someone investing their own money that they have earned and paid tax on should be taxed again should it make a gain.

stevo838383 wrote: »

No issue with tax on my salary just an issue tax on gains from an investment funded by my already heavily taxed money

I've a friend that might be able to help you there, his name is Bobby Axelrod. Maybe give him a call when Season 5 resumes.

What's worse is that unproductive property investment is often free of CGT, yet investment in companies is taxed more.

Ireland is biased towards property.

The first €1,270 of taxable gains in a tax year are exempt from CGT. Sell some shares before the end of December and another batch in January. You’ll still have to pay 33% capital gains tax on any gain above €1,270 each year but at least it helps a little.

stevo838383 wrote: »

No issue with tax on my salary just an issue tax on gains from an investment funded by my already heavily taxed money

The CGT is on the gain within the investment not on the funds you put in yourself. I'd recommend you pay it to be honest - being a tax cheat isn't something to be proud of and as another poster suggested you could sell some now and then another batch in January and avail of the tax free allowance of €1,270 from both years.

Nobody likes paying tax and unfortunately Ireland is a tax nightmare for retail investors but Revenue are one state agency I wouldn't mess with. The possibility of having your name published on the tax defaulters list (or worse) is not something to be taken lightly.

MrSquanch wrote: »

Can someone please elaborate on this or link to some explanation of how it works in practice?

Does your personal Bank for example eventually report all income and deposits to revenue?

Banks are obligated to report a tonne of stuff to Revenue. With an EU bank I think FATCA and CRS applies, but broadly Irish domestic banks will be reporting the same. So here you go: https://www.revenue.ie/en/companies-and-charities/international-tax/aeoi/what-information-is-reported-to-revenue-under-fatca-and-crs.aspx

Here's an article from the Irish Times 3 years ago about it https://www.irishtimes.com/business/personal-finance/you-your-bank-and-revenue-big-brother-or-fair-play-1.3033961

Revenue has teams of individuals who work on audits and compliance. Your info will be passed over, your account scored for risk by an algorithm and then passed to an auditor.

The real risk is that if you are audited and found to have hidden something from them, the interest and penalty fees will be laid on top of the actual tax in a fairly punitive way. The interest rate is 0.0219% - Per day. The penalty fees are a minimum of 3% but can go all the way to 100% and scale based on whether they feel it was neglect or actual misconduct. Just deciding to not pay your CGT is misconduct.

You can take a look for yourself at who has been bold and what they ended up paying, and also look forward to your name being published on this list and reported in the media:

https://www.revenue.ie/en/corporate/press-office/list-of-defaulters/2020/defaulterslist-part2-june2020.pdf

So if we take the first person on that list, they're cited for non-payment of capital gains and income tax after a Revenue enquiry case. The original tax would have been €86,475 and to that Revenue has added €25,367 of interest and €50,707.80 of penalties for a total liability of €162,549.80 - Depending on how much of the €86k was income and how much was CGT, there's a chance that the penalties and interest along with the original tax bill adds up to about the same as the total gain the person actually made.

MrSquanch wrote: »

Thanks for the information Nijmegen!

One thing I find interesting is: "Account balance at time of reporting"

It does not mention Bank transfers and deposits? So it seams like Revenue does not necessarily see what happens for a normal current account that is not accumulating savings? (under a certain amount, say 1k a per month)

Not to hi-jack the thread!

To be clear, what I outlined above is not a comprehensive list of ways that Revenue collects data from banks and other sources to determine who to audit. You also have to consider the data they collect from the originating source of the money as well as the recipient destination, also - Lets say, for example, you were using a share trading platform to make gains and were transferring those in. There's another source or two of data there they can gather.

The general rule with Revenue is that they will get you in the end, if you're consistently sneaking one past them and it's not a few small bob in the hand; and the penalties and interest will outweigh the gain. You might as well go down to Paddy Power as take the risk of them not finding out.

MrSquanch wrote: »

That's fair enough, I pay my taxes...
Unlike one of my neighboring farms according to that list haha

But "a few small bob in the hand" is what came to my mind when I read the "Account balance at time of reporting".

Its OT, but in the case of small irregular nixers, does the revenue have a hard policy about a couple hundred a month?

No, if they select you for an audit or an investigation you will be pursued no matter the amount you're out by. Many investigations are speculative in nature and turn up nothing, but if they discover you're running them for a few hundred a month there's no reason for them not to dive right in and go back five years and while they're at it look at everything else you might be involved in. I knew a chap who had an issue with it that was not on the face of it big money and all of a sudden his kids college grants and a relative's welfare matters came onto the table.

Look at the Q1 investigations - https://www.revenue.ie/en/corporate/press-office/press-releases/2020/pr-090620-revenue-publishes-list-of-tax-defaulters.aspx

In the 3-month period to 31 March 2020, a total of 675 Revenue audit and investigations, together with 20,762 Risk Management Interventions (Aspect Queries and Profile Interviews), were settled, resulting in yield of €107 million in tax, interest, and penalties.

It's the 20,762 "risk management interventions" your few hundred a month might fall into. That's one 3 month period with Covid at the end - they performed 22,432 the previous quarter (Q4 of 2019) on top of 719 audits.

If we take Q4 of last year, they took in €169.31m in "compliance yield". That's €7,313.29 on average per investigation. Not every investigation will yield a result and some investigations yield very big results (just 45 settlements netted nearly €20m) so there's statistically likely to be a lot of little cases and settlements contained in the numbers.

Let's say you're taking €500 a month in nixers and get away with it for 36 months (earning €18k) and lets say your declared income has you in the higher tax bracket. Revenue will hit you for 52% of that in tax and PRSI (€9,360); they'll hit you with the per day penalty (I'm not smart enough to calculate this entirely properly as obviously you're non tax complaint for different amounts of days for each portion), but lets call it €1.5k or so and then they'll probably slap you with a 100% penalty of another €9,360, and now your "ah sure it's only €500 a month" is gonna cost you €20k in tax on €18k in earnings. That's well worth a revenue investigator paid €40k a year taking a look at because the algo said he should.

Bear in mind Revenue auditors do things like sit outside chippers occasionally and count punters in and out and then stroll in to pull the till rolls to compare to the number of people they saw walk out with bags of (quite cheap!) chips. It's not about the value of the evasion they catch on that nights take, it's about ensuring every chipper knows that'll happen so just obey the rules and pay your taxes.

there will be a digital footprint

ted1 wrote: »

He’s asking a legitimate question. Tax avoidance is perfectly legal. I believe the OP is looking for ways to avoid it.

Revenue tried to land me with a bill of 34k. I challenged it, refused to it abs managed ti get them to pay me 500 for over payment.

Asking if keeping money in Revolut or another account will mean the Revenue can't see any gains isn't some clever accounting ploy to legitimately avoid tax - it's evasion.

Mantis Toboggan wrote: »

What are the consequences for failing to declare and if not declaring is it likely to be discovered?

So if in the future you've a change of heart and make a disclosure you will still be liable for the tax due, along with a late filing surcharge, interest and appropriate penalties assuming your disclosure is accepted as qualifying. If Revenue come to you before you go to them, the it's tax, surcharges, interest and higher penalties. Depending on the liability amounts then there's also potentially publication and prosecution.

Regarding the likelihood of being discovered, tax authorities and financial institutions around the world are sharing more and more data each year which is fed into automated risk systems. There are also data analysts within Revenue working to improve detection.

Hi,

I'm trying to make a payment on-line on CGT that I owe having recently disposed of shares.

I've logged in to my account.

1. Gone to Payments/Repayments.

2 Selected Make a Payment.

3. Selected Tax (as description identifies it as covering CGT)

4. I'm then asked to select which tax I wish to Pay.

5. I don't see any option in this list for CGT.

Can the payment be made under Income Tax? Or which option in this list should be selected to pay the owed CGT?

I've already calculated out what I owe so only need to pay over the amount.

relax carry on wrote: »

So if in the future you've a change of heart and make a disclosure you will still be liable for the tax due, along with a late filing surcharge, interest and appropriate penalties assuming your disclosure is accepted as qualifying. If Revenue come to you before you go to them, the it's tax, surcharges, interest and higher penalties. Depending on the liability amounts then there's also potentially publication and prosecution.

Regarding the likelihood of being discovered, tax authorities and financial institutions around the world are sharing more and more data each year which is fed into automated risk systems. There are also data analysts within Revenue working to improve detection.

Just on the penalties and surcharges any idea what these amount to? I might have gone slightly over the allowance in previous years, if I declare now could they discover I went slightly over the limit years ago and hit me with big fines?

Few years back revenue discovered my wife had underpaid income tax during a grant application. Was strange as she works for the government. But anyway what she had underpaid was all that was due, no talk of surcharges or penalties.

HungryEmperor wrote: »

I have sold off stock that was present on the NASDAQ.

It would have amounted to about 500 euro in gains. As this falls within CGT allowance I don't need to pay anything as this is the only thing I have sold this year.

Do I still need to somehow declare it? I am unsure if this is something I need to do or how to go about it.

https://www.revenue.ie/en/gains-gifts-and-inheritance/transfering-an-asset/when-and-how-do-you-pay-and-file-cgt.aspx