{"id":646792,"date":"2026-10-06T20:14:12","date_gmt":"2026-10-06T20:14:12","guid":{"rendered":"https:\/\/www.newsbeep.com\/ie\/646792\/"},"modified":"2026-10-06T20:14:12","modified_gmt":"2026-10-06T20:14:12","slug":"capital-gains-tax-cut-will-cost-exchequer-e186m-a-year-in-budget-2027s-most-expensive-measure-the-irish-times","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ie\/646792\/","title":{"rendered":"Capital gains tax cut will cost exchequer \u20ac186m a year in Budget 2027\u2019s most expensive measure \u2013 The Irish Times"},"content":{"rendered":"

The Government\u2019s decision to reduce the standard rate of capital gains tax<\/a> (CGT) will cost the exchequer an estimated \u20ac186 million in a full year, making it the single most expensive measure announced in Budget 2027<\/a> outside the personal income tax package.<\/p>\n

T\u00e1naiste and Minister for Finance Simon Harris<\/a> said the reduction in the CGT rate from 33 per cent to 31 per cent would \u201creward risk and facilitate the scaling-up of home-grown Irish firms\u201d.<\/p>\n

The new 31 per cent rate, which applies to profits from the sale or gifting of an asset, will not apply to sales of development land, which will continue to be taxed at 33 per cent, the Department of Finance said. It will apply to disposals made on or after October 7th. <\/p>\n

The measure will cost the exchequer \u20ac46.5 million next year and \u20ac186 million in a full year, according to the Department of Finance<\/a>\u2019s estimates, published with the budget on Tuesday.<\/p>\n

\u00dana Ryan, tax partner at Grant Thornton Ireland, said the reduction, while modest, is \u201cvery much welcomed\u201d. <\/p>\n

However, she said it is \u201cunlikely to materially change investment decisions, encourage significantly greater levels of entrepreneurship or meaningfully accelerate the recycling of capital into the Irish economy\u201d, and a larger cut would have been better in that regard.<\/p>\n

[\u00a0Budget Q&A: Submit your questions to our expert panel on budget dayOpens in new window<\/a>\u00a0]<\/p>\n

Separately, Harris announced several changes to the research and development (R&D) tax-credit regime. The relief allows businesses undertaking research to claim back a percentage of the total costs of their activities in cash or against their corporation tax bill in annual instalments.<\/p>\n

Currently, companies can claim back up to \u20ac87,500 in the first year. This threshold will now increase by 20 per cent to \u20ac105,000, to provide cash flow support to smaller R&D projects, Harris said in his budget speech. <\/p>\n

It comes after his predecessor, Paschal Donohoe, increased the amount of relief available to businesses under the scheme from 30 per cent to 35 per cent of qualifying expenditure in Budget 2026.<\/p>\n

[\u00a0Budget 2027 main points: Minimum wage to rise 79 cent; \u20ac12,000 per year limit for investment schemeOpens in new window<\/a>\u00a0]<\/p>\n

At the time, the Coalition also increased the threshold for first-year refunds under the scheme to \u20ac87,500 from \u20ac75,000 to support smaller projects. <\/p>\n

On Tuesday, Harris said the upcoming finance bill will increase the existing limits for work subcontracted to third-level institutions and third-party companies to 20 per cent or \u20ac200,000, whichever is greater. <\/p>\n

At the moment, companies can claim back subcontracted R&D costs of 15 per cent, up to a maximum of \u20ac100,000, against their total qualifying in-house R&D expenditure. <\/p>\n

The so-called angel investor relief, which offers reduced rates of CGT to qualifying individuals and partnerships, has also been extended. <\/p>\n

[\u00a0All inheritance tax free thresholds rise in the budget but no other reformsOpens in new window<\/a>\u00a0]<\/p>\n

The changes will cost an estimated \u20ac58.6 million next year and \u20ac118.3 million in a full year. <\/p>\n

Commenting on the budget announcement, Ian Collins, tax partner and head of innovation incentives at EY Ireland, said businesses were not expecting movement on the headline rate after the changes announced last year. <\/p>\n

\u201cHowever, they have been looking for continued progress in modernising and broadening the R&D regime to make it more fit for purpose,\u201d he added.<\/p>\n

Separately, the Government announced a commitment to invest \u20ac1 billion in the scaling-up of indigenous Irish companies through the Ireland Strategic Investment Fund (ISIF).<\/p>\n

\u201cThis is ISIF\u2019s biggest ever investment in scaling, and it will be a three-year programme running up to 2030,\u201d Harris said. <\/p>\n","protected":false},"excerpt":{"rendered":"The Government\u2019s decision to reduce the standard rate of capital gains tax (CGT) will cost the exchequer an…\n","protected":false},"author":2,"featured_media":646793,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[5168,72,6724,61,60,70],"class_list":["post-646792","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-budget","tag-business","tag-capital-gains-tax-cgt","tag-ie","tag-ireland","tag-simon-harris"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/646792","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/comments?post=646792"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/646792\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media\/646793"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media?parent=646792"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/categories?post=646792"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/tags?post=646792"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}