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Capital Gains Tax

  • 19-12-2006 2:54pm
    #1
    witchity
    Closed Accounts Posts: 10 ✭


    Can anyone help me with this. I'm due to close on my house tomorrow, but the seller thinks he does not have to pay Capital Claims Tax, but according to my solicitor he does. We've been told that we need to hold back 15% of purchase price to give to revenue if seller does not produce a Tax Clearance Form.

    After all of this he is no refusing to close on the deal, cause he still reckons he doesnt need to pay it. I've double checked with Revenue and they've confirmed it and said it is a very common procedure.

    Has anyone else been involved in anything like this before? We had to move out of our old house on friday and have been staying with friends since, but now it looks like the deal is never going to close :confused:


Comments

  • #2
    [Deleted User]
    Posts: 0 ✭ [Deleted User]


    It's standard to withhold the CGT in certain circumstances, the most common being where the sale price exceeds 500k and the Vendor does not produce a clearance cert (think its a CG50A) on closing.


  • #3
    jimmycrackcorm
    Registered Users, Registered Users 2 Posts: 14,378 ✭✭✭✭jimmycrackcorm


    I can't see for a house purchase where the buyer is responsible for collecting the capitals gains tax of the seller.


  • #4
    Victor
    Registered Users, Registered Users 2 Posts: 78,579 ✭✭✭✭Victor


    jimmycrackcorm wrote:
    I can't see for a house purchase where the buyer is responsible for collecting the capitals gains tax of the seller.
    They wouldn't. Two cheques are written, one to the vendor, the other to the revenue.


  • #5
    [Deleted User]
    Posts: 0 ✭ [Deleted User]


    jimmycrackcorm wrote:
    I can't see for a house purchase where the buyer is responsible for collecting the capitals gains tax of the seller.

    Paragraph 11 of the Fourth Schedule to the Capital Gains Tax Act, 1975

    http://www.irishstatutebook.ie/gen121975a.html


  • #6
    Lex Luthor
    Registered Users, Registered Users 2 Posts: 11,220 ✭✭✭✭Lex Luthor


    The buyer is not responsible in ANY way to pay the CGT for the seller. Close the sale on the house and let the seller worry about his/her tax affairs.


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  • #7
    [Deleted User]
    Posts: 0 ✭ [Deleted User]


    Lex Luthor wrote:
    The buyer is not responsible in ANY way to pay the CGT for the seller.

    Incorrect. The buyer is required to split the money and pay some to Revenue in the absence of a clearance cert in certain cases (price exceeds 500k, Vendor lives abroad) etc. Ask any Solicitor who deals in conveyancing. In fact, not only is it required, it's also one of the instances where most Solicitors will not accept an undertaking to obtain the Cert.
    Lex Luthor wrote:
    Close the sale on the house and let the seller worry about his/her tax affairs.

    A solicitor who closes a sale in the absence of a tax clearance cert in the instances where one is required may be looking for their insurance pretty quickly.


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