Capital Gains and Losses

January 2023

The market value of property has largely recovered from the crash that hit the sector in 2008. Hopefully, members that found themselves in negative equity around that time, are facing into a better position at the turn of the year.

Notwithstanding, many members were forced to sell property over the course of the last decade in order to pay down debt and hopefully survive. In those circumstances it is possible that losses arose on the disposals. We would recommend that members keep a close eye on the losses arising as they are available for offset against gains in the future. Every €300 of losses is a possible €100 tax saving.

Presently, there is no restriction on permitting a landlord to carry forward capital losses. Any capital losses that have been incurred on property, shares or any other assets, are available to carry forward indefinitely. This means that it can be set against any gains that may arise in the future. When quantifying your losses, members should ensure that they account of any stamp duty and legal fees that were incurred regarding the acquisition or disposal of the property or indeed any other costs on the disposal or acquisition, registrations, estate agents etc. An allowance is also available for enhancement expenditure. This is generally capital expenditure that improves the property. E.g. property extension.

Members should be careful on the transfer of assets to other family members, as Revenue will treat this as a disposal for capital gains tax purposes even where no consideration is paid. Where losses arise on a connected party transaction, those losses are restricted in their future use. They can only be offset against gains arising onasset transfer to that same party. Any losses that arise in a year can be carried forward but cannot be carried back. They are only available in the tax year in whichthey are incurred. So, prioritise the disposal of loss bearing assets,as it would be a sin to sell a loss bearing assets after a gainbearing asset and not be allowed use the loss. Where a contractis signed in 2022 but the sale doesn’t close until 2023, the loss should still be available in 2022 on the basis that the contract thatwas signed, actually closes.

Keep good records of any losses incurred, as they may not beused for some time to come so it would be useful to have good documentation in place to support any future claims.

Members should be aware that most commercial transactions have tax consequences, so it makes sense to get professional advice before doing anything. Good advice may highlight opportunities toreduce the tax in question or at least let you know how much is at stake.

This article provides a short non-technical summary on a tax topic. It should not be relied upon as professional advice as each case needs to be considered in isolation. It is prepared by Cathal Lawlor B.Comm, A.I.T.I, TEP, Lawlor Kiernan Solicitors and Chartered Tax Advisors.

Please contact Kathleen Reilly at or 01872 5255 to arrange a consultation with Cathal.

* take note of the date of publication of this piece. Information on this website may change with the passing of time and the law is constantly changing. Whilst we take steps to ensure the accuracy of the information, we cannot guarantee this. Clarification should always be sought.  
Categories: Property Management, Taxation, and Uncategorized.