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CGT Exemptions & Reliefs interpretation

  • 28-08-2009 9:13am
    #1
    _JOE_
    Registered Users, Registered Users 2 Posts: 479 ✭✭


    Hi all,

    I was looking at the CGT exemptions (private residence full relief) to be specific;
    Gains made on the disposal of your home together with its gardens or grounds up to an area (exclusive of the site of the residence) of one acre may be exempt. For full relief to apply, you must have occupied the home as your principal private residence throughout your period of ownership or to within 12 months of the date of disposal. Relief may be restricted where the home was not your main residence throughout the period of ownership (other than the final 12 months), where any part of it was used exclusively for the purposes of a trade, business or profession or where it is sold as development land, for example part of the garden

    Can anyone give me an example where this would apply? For instance, if a family inherit a (second) dwelling and the son/daughter moves into the house sometime thereafter, would the transfer be exempt from cgt, fully or partially?

    Is this a valid example or can someone give me a better one? I was reading through it yesterday and just trying to get it clear in my head.

    Thanks in advance!!


Comments

  • #2
    Berti Vogts
    Registered Users, Registered Users 2 Posts: 417 ✭✭Berti Vogts


    _JOE_ wrote: »
    Hi all,

    I was looking at the CGT exemptions (private residence full relief) to be specific;



    Can anyone give me an example where this would apply? For instance, if a family inherit a (second) dwelling and the son/daughter moves into the house sometime thereafter, would the transfer be exempt from cgt, fully or partially?

    Is this a valid example or can someone give me a better one? I was reading through it yesterday and just trying to get it clear in my head.

    Thanks in advance!!

    There's generally no CGT payable on the transfer of an asset following death. Noting that a family cannot inherit anything!

    The PPR exemption basically provides that if someone occupies a house as their PPR throughout the period of ownership and that person then sells the house for a gain, the gain is exempt from CGT. The "within 12 months of the date of the disposal" is basically designed to allow people a period in which they can sell their old house free of CGT if they have moved somewhere else in the meantime.

    Relief will be restricted if for example the house was owned by a person for 10 years and it is only occupied as their PPR for 5 of those 10 years.


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