Bonds

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fluppet

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Can you confirm that there is no difference from a taxation point of view between Irish government bonds, Irish non-government bonds, EU government bonds, and EU non-government bonds: for all of them, they are treated just like a normal source of income on which I will only pay Irish income tax (at 0%, 20%, or 41%) on the bond interest? If I left the bond until maturity, I would pay CGT if the par value was greater than the price I paid for the bond (on the difference between what I paid and par value), or would I pay income tax on it instead? This would then make them different from the case in the USA where you do not pay certain taxes on certain bonds - I think US Treasury bonds are exempt from federal tax, munincipal bonds are exempt from federal, state, and local tax, etc.
 
I seem to recall that Irish Government Stock was exempt from CGT, but I'm not sure if that is still the case.

Indeed, if the Revenue Guide is up to date, then it appears that Government and local authority stock is exempt.
 
CCOVICH is correct, gains on Irish Gov't bonds are exempt from CGT but all gains on other bonds are liable to CGT.

Of course, the counterpart to Irish Gov't bonds being exempt, is that losses on Irish Gov't bonds cannot be offset against other capital gains.
 
Thank you.

I have another related question:
If I bought French government inflation-linked bonds ([broken link removed]) and left them until maturity would this be the tax situation:

I pay Irish income tax on annual coupon payments
I pay Irish CGT on increase in par value (including increase due to inflation adjustment)
That is all

Is this correct, or would I be required to pay French tax also?http://www.aft.gouv.fr/article_1717.html
 
If you bought them at par and held until maturity (I presume OATs are redeemed at par?), I would imagine you are in a no gain/loss from a CGT point of view.

If you bought them at a discount, it would appear that there would be a chargeable gain.

Inflation is no longer relevant and indexation is no longer allowed as far as I am aware.

I have no idea what the Irish/French tax treaty has to say on the matter.
 
CCOVICH said:
Inflation is no longer relevant and indexation is no longer allowed as far as I am aware.
Click to expand...
I'm afraid I don't understand what you mean here. Would it be possible to clarify it?

As the bonds I am referring to are inflation-linked, the value at maturity would probably be greater than the value at which I invested in the bond. Would this not result in CGT?
 
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