Capital gains tax

mathie

Hi
If you sell a house and don't have to pay Capital Gains Tax (as it was the principle primary residence) do you still have to fill out a form or declaration or something?

thanks
M

IANAL (hullaballoo's test a/c)

Shouldn't your solicitor know the answer to that one?

mathie

I asked my solicitor but they said to ask an accountant.
I dont have an accountant

IANAL (hullaballoo's test a/c)

Get a new solicitor man. Solicitors should know tax law just as well, if not better than accountants. Maybe just get a different solicitor for the purpose of the sale of your house.

mathie

IANAL wrote:

Get a new solicitor man. Solicitors should know tax law just as well, if not better than accountants. Maybe just get a different solicitor for the purpose of the sale of your house.

A bit late for that now.
Contracts have been drawn up.
Should the solicitor definitely know about it?
The sol told me to ask my accountant.

Thanks

M

dats_right

I cannot accept that a solicitor would not know the answer to that question. Maybe, your solicitor wasn't able to advise on whether CGT is in fact payable for some reason or other, in that case, then they are quite correct to refer you to an accountant. But, if it is a case that they didn't know whether a CGT Certificate was needed, than ALL i can hope is that the OP is actually dealing with a Legal Executive or some other junior person in their solicitor's office (as is often the case when one pays bargain basement fees) [note. Not necessarily implying that OP engaged services of such a firm] . If you are in fact dealing with a qualified solicitor and they couldn't tell you the answer to your question on the spot, well then frankly you should engage the services of another solicitor immediately.

In regard to CGT Certificates, the legal position is quite clear; it really is irrelevant whether a partiular transaction is or is not liable to CGT. The only thing that is relevant is the amount of the consideration (i.e. the purchase price), if the purchase price is over €500,000, then a solicitor acting for the purchaser will insist on a CGT Clearance Certificate being furnished on closing, or must make a reduction of 15% from the purchase price and forward this sum to the Revenue Commissioners along with information regarding the purchase.

Therefore, if the purchase price is €500,000 or above it will be necessary to obtain a CGT Clearance Certifcate prior to closing, if it below this amount then none will be needed. A Clearance Certificate is obtained by your solicitor filling out Form CG50 and sending it to the Revenue.

http://www.revenue.ie/forms/cg50.pdf

mathie

The sols exact reply on the matter...
(The house is selling for less than 500K BTW)
Thanks
M

I would advise that you seek tax advice from an accountant here as I am
legals only and yes you both are primarily responsible for CGT if any is
payable.

However I do know that an individual has an annual cgt exemption of 1270
euors off any gain made. When calculating CGT payable you are allowed
deduct auctioneers fees and legal fees incurred in disposing of the
property and any stamp duty paid on the acquisition.CGT is calculated at
the date of the contract disposing of the property as opposed to the date
of the actual deed.

If your sale price exceeded 500,00 euros I would have to apply for a cgt
clearance certificate on your behalf but as under this amount it is not a
requirement for closing.

What you are referring to is principal private residence relief (Section
604 TCA 1997) and again should seek tax advice.This relief exempts
from cgt a gain arising on the disposal of a persons principal private
residence if its the persons only or main residence

What you are also referring to is the deemed occupation and it is deeemed
that where a vendor has not always occupied the dwelling, there is a
deemed period of residence in the last 12 months of ownership

CGT is at the rate of 20%. Please confirm your situation with your
accountant, the above is by no means definite

dats_right

OP in fairness that is fairly comprehensive advice from your solicitor and is absolutely correct. Your solicitor having advised you regarding your potential liability is merely covering themselves by stating that you need to contact an accountant.

templetonpeck

dats_right wrote:

ALL i can hope is that the OP is actually dealing with a Legal Executive or some other junior person in their solicitor's office

I'm a legal executive and I can tell you that even we know the situation regarding CGT on the sale of a house We legal executives are a god send to solicitor's offices