Shareholder faces ‘double taxation’ on shares he owns

I suspect readers other than me may be interested in the capital gains tax (CGT) liability date arising from the Bluefin acquisition of our Irish Continental Group shares. And also in the relevant dates when calculating capital gains.I understand that, all things being equal, the sale will be completed during Q4 of 2026. This seems to imply we may all have a very short window to calculate and pay the resulting CGT to Revenue. From my reading of the scheme document and other announcements, I’m guessing the purchase transaction may end up happening some time in late November. In which case, I understand I will be required to file and pay by December 15th. On what date will the transaction be deemed to have been made? The date of some announcement by the company or the date that a cheque or bank transfer actually reaches me? READ MOREI also need to work out my tax liability. I inherited my shares and, as it happens, the value when probate was granted was significantly (33 per cent) greater than on the date of the death of my mother. As advised, I calculated and paid capital acquisitions tax (CAT) based on the value as of date of probate. However, I have been told the relevant date for calculating capital gains is the date of inheritance rather than the probate date. This seems rather unfair as I will be taxed twice on the gain in the value of the shares between the disposer’s death and the probate date. (In my case the CGT bill looks like being 20 per cent greater than natural justice would suggest it should be.) I am wondering how Revenue justifies this switch in valuation dates? Or perhaps I have been misinformed of the rules?SNYour query is timely as the €1.2 billion management buyout of Irish Continental led by long-time chief executive Eamonn Rothwell via the bid vehicle Bluefin was approved by the High Court last week. That clears the way for the deal to be completed within weeks.The bid by Rothwell, who has run the Irish Ferries business for the past 24 years, and his team was announced in late July. It is the second time he has tried to take the group private, with a previous attempt 19 years ago being frustrated by other interested parties.The catalyst was a determination – shared over recent years by other companies listed on the Irish Stock Exchange, now Euronext Dublin – that shares in the business, which floated in Dublin in 1988, are not properly valued, a factor that market dynamics suggest is unlikely to change.It was a close-run thing this time around too, with an extraordinary general meeting of shareholders to approve the offer put back by a fortnight on the eve of the intended vote when it became clear to the company’s board that not enough votes had been secured to seal the deal.Eventually, on September 10th, 79.2 per cent of votes cast supported the €8-per-share offer, above the 75 per cent threshold required.That decision required High Court approval given the structure of the deal. That sanction came last Tuesday. As a result, your shares will be compulsorily acquired by the bid vehicle, Bluefin. You have no further say in the matter, nor any option to retain your shares as part of what will now be a privately-owned groupIn the immediate aftermath of that ruling, Irish Continental said it expected trading in the shares on Euronext Dublin to stop at close of business next Friday, November 20th.Payments to shareholders, it said, were expected to be made no more than two weeks after that – by December 4th.Capital gains tax in Ireland is payable on gains made on the sale of assets. The key date, according to the legislation, is when the gains are realised.If the gains are realised between January 1st and November 30th of any year, the tax is payable by December 15th of the same year. If the gain is realised in December, tax falls due by January 31st of the following year.You can be subject to both late payment penalties and to interest if you miss the relevant date.In addition to paying the tax, you must also make a return to Revenue with the details of the gain. For those filing annual returns – which is a growing number of us, even PAYE workers, as we claim for things such as college and health expenses – the details can be registered with your normal annual return for 2026. Any individual not otherwise filing an annual return will need to complete and file a CG1 Capital Gains Tax Return and Self-Assessment form.As the Irish Continental management buyout straddles the capital gains tax deadlines, it is easy to see why people could be confused. The shares will cease trading before November 30th but it could be December 4th before you get your payment.Technically, I guess, if that payment arrives early – before November 30th – your capital gains tax bill is due by December 15th but, given the stated payment deadline is December 4th and the tight deadline involved, I cannot see Revenue making a fuss as long as payment of any tax due is made by January 31st of next year.In any case, these “payment due” dates tend to be used in full by companies going through such takeovers as they are highly regulated complex processes.I would not expect to see payment until December 4th or the days immediately preceding it so I think you can be comfortable with the January 31st deadline. That’s not a lot of time to get things organised anyway, with Christmas intruding in that window, but it should give you a eight-week window to get sorted.Double taxationTurning to your second point, I can certainly see your concern.As you say, for capital acquisition tax (inheritance tax) purposes, the relevant date was something called the valuation date. This can be a very complex notion in itself, unfortunately. It is the date you are deemed to have actually got control of the asset under inheritance and, for most people, this will be the date of probate.And that is what you did. In terms of assessing the value of your inheritance for tax purposes, you took the value of the shares on the date of probate.However, shares in Irish Continental have proved fairly volatile at various times over the past six years – especially over the one-year-plus window of a typical probate process. In your case, this meant the valuation date value of the shares was about 20 per cent higher than at the date of your mother’s death.This becomes a problem because, with capital gains dying with an owner, the successor in ownership of an asset is responsible for any capital gain from the date. So, for capital gains tax, your liability stretches back to what the shares were worth when your mother died, not when you actually got control of them.There is some relief available under Section 104 of the Capital Acquisitions Tax Consolidated Act 2003 but only where the two separate taxes are charged on the same property on the same eventThat is not the case here. The inheritance tax arose on your mother’s death and the capital gains tax arises only on the subsequent sale, via takeover of the business in which you sold the shares.I can find no provision that would grant you relief in your position.In terms of how Revenue justifies this, it is simply an accident of fate – the provisions to two separate pieces of legislation.Unfair? Yes, it would certainly appear so. Have you been misinformed? No. Have you any recourse to relief? I don’t think so.On the upside, you are still ahead financially on shares you never purchased yourself.