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How to make money and not pay tax on it – from watches, cars, homes and bonds

While it is impossible to do so in many cases, there are ways of potentially making money that won’t attract the tax man’s attention

Who doesn’t want to avoid paying tax? While it is impossible to do so in many cases, there are a number of ways of potentially making money that won’t attract the attention of the tax man, some of which may surprise.

Your home

For most Irish people the home is where most of their wealth lies, and these days it will often exceed any benefits due under a private pension. And no tax is due on any gains made on the sale of this property.

Even if someone bought a home for €20,000 back in the 1980s and sold it today for more than €1 million, all those gains are deemed to be tax free, as long as the property was always the owner’s principal private residence, it stands on no more than one acre and the sale price is not inflated by the property’s “development value”.

This may change, however. In last year’s report from the Commission on Taxation, it was recommended that this relief should be restricted over time. The report argued that the complete exclusion of the home from capital gains tax (CGT) is “an anomaly” and favours better-off homeowners. However, it did not specify just how any reform might be framed, so any change, if it is to come – which is unlikely given how politically unpalatable it would be – is some way off yet.


Government bonds

If you’re an Irish resident you won’t have to pay any CGT when you sell or redeem an Irish Government bond.

If you earn interest on the bond however, you will pay tax on this at your marginal rate of tax. This may be at a higher rate than CGT at 33 per cent, given the higher income tax rate is 40 per cent. It is also higher than deposit interest retention tax (Dirt) charged on deposits, which is also 33 per cent.

The exemption from CGT also applies to a range of securities, including debentures, debenture stock and certificates of charge issued by semi-States, including the ESB, Bord Gáis, Uisce Éireann, RTÉ, CIÉ, Bord na Móna or the DAA (typically such securities are not available to retail investors, however).

Securities issued by the Housing Finance Agency, as well as the National Development Finance Agency, are also exempt from CGT.

Lottery wins

As if winning the lottery wasn’t good enough on its own, an added bonus is that you won’t be subject to any CGT on your winnings.

Yes, if you make a killing on the Lotto or Euromillions, or even on a scratch card, you’ll get to keep all the spoils yourself. Where tax might arise, however, is if you look to make a gift to another person from the winnings. They might then be hit with inheritance/gift tax, depending on the amount, their relationship to you and any other inheritance or big gifts in excess of €3,000 they have received previously.

Once you invest or deposit your money, any gains on this will subsequently be liable to CGT or Dirt.

It also means that if you win a house in one of those raffles for local GAA clubs that have proliferated around the State, you also won’t be stuck with a bill for the tax man.

Current raffles include the chance to win a three-bed house in Kinsale, Co Cork, which has a value of €360,000 – or a cash alternative of €320,000. This draw is being run by Kinsale GAA. Roscommon GAA, meanwhile, has previously held draws to win a home in Dublin or London.

Other taxes may apply, however; a spokeswoman for Revenue notes that where the prize won is a property, stamp duty will generally apply. This means that if you win a house or an apartment in such a prize draw, you will have to pay stamp duty on the transfer of the property. This is charged at the rate of 1 per cent of the market value of the property up to €1 million and 2 per cent on any balance over €1 million. So, a €350,000 “prize” will result in a tax bill of €3,500.

Prize bonds

You can also make a tax-free gain should you invest in prize bonds and be drawn out as a winner. Run by State Savings, the maximum you can win on a prize bond is €250,000, which is given out four times a year. Up to €50,000 can be won in weekly draws.

You can invest from as little as €25 to as much as €250,000, per person, in prize bonds.

It should be noted, however, that the chances of winning on prize bonds has fallen in recent years. This is because as interest rates fell, the National Treasury Management Agency (NTMA) slashed the rate of the total value of bonds that is paid out in prizes to just 0.35 per cent back in February 2021. As of end 2021, the total value outstanding was some €4.4 billion, so it means an annual prize fund of about €15.4 million.

This pales in comparison with previous years. Back in 2013, for example, the interest rate on offer was between 1.75 per cent and 2.25 per cent, which meant that there was a prize fund of some €35.2 million up for grabs. The lower the funds in the kitty to be paid out in prizes, the lower the possibility of a significant prize – tax free or otherwise.

Similarly, the range of savings products offered by State Savings are free of Dirt.

Classic cars

While most cars tend to depreciate the moment they are moved from the forecourt, some cars actually increase in value.

And if they do the owner won’t have to pay CGT, as gains on private motorcars are exempt from tax.

Typically, such an incentive will apply only to classic cars, whose value might continue to increase over time – although given the peculiarities of the post-Brexit car market, many second-hand car owners have recently found that they are getting back more than they originally paid for their car.

The other good news for classic car owners is that their value has increased strongly of late. Research from Knight Frank shows that car values rose by 25 per cent last year, the strongest finish for nine years. Records included the $143 million paid for a Mercedes-Benz Uhlenhaut Coupé – the most expensive car sold.

If you are looking to invest in a classic car – and, really, you’d need to know your stuff if you do – David Golding has some options. A 1974 Alfa Romeo Spider (with 80,000km on the clock), for example, will set you back about €23,500, while a 1983 BMW 5 Series is about €11,950.


If you’re a fan of an accumulator bet on the Premier League, or a punt on the gee-gees, you may not have thought of the tax man when you celebrated your winnings. But there was no need to worry, as gains on betting are free of CGT.

And it’s not just gains on betting on the outcome of a football match that are tax free, financial traders can also walk away with substantial tax-free gains, as spread betting is also CGT free.

Spread betting allows you to trade in shares by betting on whether the value of the asset is going to rise and fall. Unlike actual trading, which is subject to CGT, you don’t own the underlying asset in spread betting, which means that any gains are exempt from CGT, while stamp duty also doesn’t apply.

If, however, you make your income via spread betting as a day trader, tax may apply, as you may be deemed to be carrying on a trade and income tax would apply. However, it can be a lot riskier than putting €100 on a horse, as leverage typically applies. That can magnify your gains, but can also make those losses much bigger.

While similar, trading in contracts for difference (CFD) is liable to CGT, but as you don’t hold the underlying security, stamp duty doesn’t apply.

Watches and handbags

There is also an exemption for so-called “movable property” such as furniture, watches or handbags, where the gain does not exceed €2,540.

Where the consideration exceeds €2,540, marginal relief applies so that the amount of tax chargeable does not exceed one-half of the difference between the consideration and €2,540.

Again, however, if you regularly trade such assets, Revenue may deem that you have a trading business, and thus taxes will apply in the normal way.