Your reader’s query last week caught my eye. It was on the subject of capital gain tax. You mentioned in your answer that a capital gain dies with the owner.I understand that, but what happens when the property is owned jointly by a couple. This is more common these days but I cannot find anywhere what that means for capital gains tax when one of the owners dies. My wife and I have a small holiday home down the country which we own jointly. We never really though about capital gains but it seems we should be.Does any capital gain up to then get wiped out by death? If not, how is it measured? R.R.It seems such a simple question and yet, in all the years I have been writing this column, it has never been raised. And, as you say, most couples these days tend to buy things as a couple rather than individually. The standard rule with capital gains is that if you buy something – a property, a piece of art, shares, whatever – you pay tax on the difference in its value on purchase and when you sell it.You are allowed to make a gain of €1,270 in any year without paying tax but, above that, you will be charged 33 per cent unless it is your family home which is almost always exempt from capital gains.If the asset is worth less when you sell than when you originally acquired it, you can net out that loss against gains from other assets so that you are not subject to capital gains until you are in profit.If you don’t have gains (or enough gains) in the year the loss arises, you carry the loss forward until it is fully offset by gains before tax enters the equation again.The other exemption is if you die still owning the asset. Say, you bought 1,000 shares at €2.70 apiece and, many years later, when they are trading at, say €7, you still hold them when you die. There is a paper profit of €4,300, but when you die, the shares form part of your estate and are treated as though they never made any gain.Joint ownershipBut what if you held those shares with your wife or, as in your case, a small holiday home?There are two ways of owning an asset jointly – as joint tenants or as tenants in common.Joint tenants are equal owners of the asset. And when one owner dies, ownership passes automatically to the other through a process called “survivorship”, without the holiday home or whatever forming part of the dead person’s estate or being managed under the terms of a will.This is how a couple will normally hold assets jointly. It can be the case for other family members too, say a mother and daughter.But what does that mean for capital gains tax?As so often, I rely on the Revenue Commissioners for some clarity.They confirm that (a) the whole asset transfers to the remaining owner or owners and (b) no capital gains tax is due at that point.However, if the surviving owner does later sell this holiday home, they will have to make two assessments. For the portion of the asset they originally owned – normally 50/50 in the case of a couple, but it can be different – they will be charged capital gains tax dating back to when the property was first acquired. In relation to the share of the deceased person, the surviving owner is deemed to have acquired that portion at its value on the death the co-owner died, not back when it was first acquired.So if you bought this holiday home for €200,000 and it is worth €300,000 when you die and €350,000 when your widow sells, she would be assessed on a gain of €75,000 (half of the overall €150,000 gain) of her share in the property and €25,000 on the increase in value in your share between the time you died and when she sold the place.That’s an overall gain of €100,000 from which you deduct the €1,270 annual tax relief, leaving a bill of €32,580 (33 per cent of €98,730).These are very round figures. There are things you can deduct from a capital gain before tax, such as any fees – such as estate agent charges or legal fees – directly incurred in its acquisition and sale. So the tax bill, in reality, would be lower. You can also get credit for any substantial upgrade of the property – the cost of an extension, for instance. Finally, if you had bought the holiday home before 2002, you are allowed to adjust the purchase price by an indexation factor, which you can find here. And, as I mentioned last week, if it was bought between December 7th, 2011, and the end of 2014, any capital gain in the first seven years of ownership is discounted when you eventually sell.Revenue assures me this is the case for joint tenants, whether they are married, an unmarried couple or any other form of joint tenants – such as a mother and daughter, or even just friends.That brings us to tenants in common, where each person owns a set portion of the asset – anything from 1 per cent to 99 per cent depending on the circumstances of the purchase.The difference here is that the asset does not pass immediately to the surviving owner. Instead, the dead owner’s share forms part of their estate.And if the asset is sold down the line, the surviving tenant in common is liable for capital gains only on their share of the asset from when it was acquired. Capital gains on the deceased person’s portion will date back for any new owner via a will or intestacy to when they acquired ownership of that share. If it is still held by an executor, that will be the person liable for any capital gain arising on the dead person’s share. Of course, if the holiday home is abroad, that can further complicate matters but that’s one for another day.Please send your queries to Dominic Coyle, Q&A, The Irish Times, 24-28 Tara Street Dublin 2, or by email to dominic.coyle@irishtimes.com with a contact phone number. This column is a reader service and is not intended to replace professional advice