Capital gain tax exemption - 7 year rule

lotusm

Hello,

I am aware the capital gains tax exemption on a property bought before 31st December is ending. However if I buy a property lets say the 15th December and contracts not signed until the 2nd January do you lose the 7 year exemption deal. So basically does both set of contracts have to be signed before the 31st December. If there is any link to revenue on this.

thanking all in advance

dogsears

lotusm wrote: »

Hello,

I am aware the capital gains tax exemption on a property bought before 31st December is ending. However if I buy a property lets say the 15th December and contracts not signed until the 2nd January do you lose the 7 year exemption deal. So basically does both set of contracts have to be signed before the 31st December. If there is any link to revenue on this.

thanking all in advance

From the Revenue Guidance notes on the relevant legislation:

"In the case of a disposal of an asset by way of an unconditional contract,
the time of disposal and acquisition is the time at which the contract is
made and not, if different, the time the asset is conveyed."

On other words, once an unconditional contract for purchase is in place (on 15 December in your example) that satisfies the acquisition requirement for the 7 year exemption. I'm assuming the second set of contracts you refer to is actually the completion/conveyance.

Alan Shore

lotusm wrote: »

Hello,

I am aware the capital gains tax exemption on a property bought before 31st December is ending. However if I buy a property [\b] lets say the 15th December and contracts not signed until the 2nd January do you lose the 7 year exemption deal. So basically does both set of contracts have to be signed before the 31st December. If there is any link to revenue on this.

thanking all in advance

How can you buy a property without signing a contract.

I don't think revenue will accept "we verbally agreed the deal". An unconditional contract signed by both sides before 31 December.

Mr. Incognito

It is possible to stamp a contract although the practice is to stamp the subsequent Deed.

You need a contract prior to Jan 1 2014 to avail of the relief

dogsears

Mr. Incognito wrote: »

You need a contract prior to Jan 1 2014 to avail of the relief

Obviously a typo but its prior to 1 Jan 2015.