Selling an Investment property - Questions

Lex Luthor

You buy an investment property for X, 3yrs ago. Since then it has appreciated by Y. How is the CGT calculated?

Simple answer is y-x multiply by 20%.

What can you offset against the profit?

Initial stamp duty?

What about the capital acquisitions that were purchased initially? Assume the 1/8th of the total of these capital acquisitions has been claimed for over the last 3yrs, can the remaining amount for the next 5yrs also be offset?

Sponge Bob

Lex Luthor wrote:

You buy an investment property for X, 3yrs ago. Since then it has appreciated by Y. How is the CGT calculated?

Simple answer is y-x multiply by 20%.

tis

What can you offset against the profit?

Initial stamp duty?

painting, letting agent fees , estate agent fees , any costs necessarily incurred are summed and deducted form the y-x figure before you calculate 20% of the balance.

What about the capital acquisitions that were purchased initially? Assume the 1/8th of the total of these capital acquisitions has been claimed for over the last 3yrs, can the remaining amount for the next 5yrs also be offset?

dunno that

Lex Luthor

Sponge Bob wrote:

tis


painting, letting agent fees , estate agent fees , any costs necessarily incurred are summed and deducted form the y-x figure before you calculate 20% of the balance.



dunno that

so do you know about the stamp duty as that was a big one?

sapper

Deductible expenditure
The amount of a chargeable gain or an allowable loss is determined by deducting
expenditure from the consideration received for the disposal. The allowable expenditure
(a) the cost of acquisition of the asset and any incidental cost of acquisition such
commission and costs of transfer or conveyance
(b) expenditure incurred for the purpose of enhancing the value of the asset which is
state of the asset at the time of disposal, and
(c) the incidental costs of making the disposal, such as legal and advertising costs.

You gotta suck up the stamp duty - I'm pretty sure it wouldn't be regarded as a "cost of acquisition". They might even claw back extra if you got a FTB allowance to buy it in the first place.

It's all in here

http://www.revenue.ie/leaflets/cgt1.pdf

Lex Luthor

sapper wrote:

You gotta suck up the stamp duty - I'm pretty sure it wouldn't be regarded as a "cost of acquisition". They might even claw back extra if you got a FTB allowance to buy it in the first place.

It's all in here

http://www.revenue.ie/leaflets/cgt1.pdf

it wasn't a FTB...thanks for the link

Victor

Lex Luthor wrote:

You buy an investment property for X, 3yrs ago. Since then it has appreciated by Y. How is the CGT calculated?

Simple answer is y-x multiply by 20%.

Increase X by the amount of your other costs, solicitors, estate agents, management, repairs, etc. assumming you haven't set them off against income tax already

Lex Luthor

Victor wrote:

Increase X by the amount of your other costs, solicitors, estate agents, management, repairs, etc. assumming you haven't set them off against income tax already

so its either one or the other, depending on whichever works in your favour?

The_Conductor

Lex Luthor wrote:

so its either one or the other, depending on whichever works in your favour?

No- an assumption will be made that you claimed these (solicitors, estate agents, management, repairs) against rental income in the relevant years. If you did not, a retrospective claim is allowable (with a cut-off of 5 years ago, the cut-off date was changed in January 2005).

A new unit is being formed by the Revenue Commissioners in Dublin Castle to investigate property transactions at present. In short- get professional advice on what is and what is not allowable. It is not simply a case of which is more favourable to you.

Lex Luthor

I'll be talking to my aunt who works in Ernst&Young, so hopefully she'll be able to help me out.

I haven't filed any tax returns for the property yet, first one will be in Oct, so now is the time to work out what to claim against.