Ammend a previously submitted Capital Acquisitions Tax Return

redbeaard

Is it possible to change a Capital Acquisitions Tax Return submitted in 2013?

I inherited a small farm in 2011 which I now live on and farm part time so I qualified for Agricultural Relief. My solicitor's accountant filed a CAT Return in 2012 which valued all the property as agricultural property despite the person who came out to value the land being told that there were 2 or 3 great sites on the land and to value them as such.

I now want to sell one of these sites but I presume that seeing as they were originally valued as agricultural land I will be hit hard by Capital Gains Tax as obviously the difference is significant.

This is my understanding.
Example:
1 acre agri land = 10,000
site = 40,000
difference = 30,000
-personal exemptoin = 30,000 - 1,250 = 28,750
Capital Gains Tax is 33% of 28,750 = 9,487

But as I understand it if the site was valued and submitted as such in the CAT then there would be no CGT to be paid at all seeing as it was always the same value. I should note that even if the sites were valued as generous sites then I would still be well under the 225,000 threshold for paying any CAT in the first place.

Do I need to do anything seeing as this is all self declared, I presume it would be much safer to do so as otherwise it may be construed as just not filing a return?

Thank you for any advice in advance and even if someone could tell me if my understanding of Capital Gains Tax is correct I would much appreciate it.

nompere

You need professional help, but property valuation is an area where difficulties are arising al the time. Valuers have been conditioned over the years to produce tax valuations that were on the low side, and this is now causing problems.

Revenue tend to be unwillng to enter into discussions where taxpayers say that property has been incorrectly valued.

Here's a good article that I came across some while back.

http://www.ohanlontax.ie/downloads/CGTforEstatesinaRisingPropertyMarket.pdf

redbeaard

Cheers for reply nompere.

Would my situation differ in that it is like the land was classified incorrectly in the first place? It's the difference between market fluctuations and 75% agri versus site land.

nompere

Specific advice isn't allowed here, particularly in relation to property matters, so I've deliberately only referred you to a discussion of the issues that can, and are, arising.

The bottom line is that you need professional assistance.

redbeaard

Oh, sorry, I should have realised that.

I am going to get professional advice but I wanted to get my head around how things worked before going into an appointment with an accountant and risk being lost in technical jargon and coming out non the wiser.

barneystinson

redbeaard wrote: »

Oh, sorry, I should have realised that.

I am going to get professional advice but I wanted to get my head around how things worked before going into an appointment with an accountant and risk being lost in technical jargon and coming out non the wiser.

You'll need specialist advice on this, accountants tend not to be strong on fairly basic CAT at the best of times, never mind say when it gets complicated.

deruler

OP, assuming the site value has always been the same, I THINK the first tax you will be subject to is CAT based on the site value, due Agricultural Relief claw back. You should be able to use the remaining threshold balance to cover this increase in taxable value.

redbeaard

barneystinson wrote: »

You'll need specialist advice on this, accountants tend not to be strong on fairly basic CAT at the best of times, never mind say when it gets complicated.

It did certainly seem like the accountant hired by the solicitor knew surprisingly little about Agri Relief considering that this is a very rural location and this type of stuff should be their bread and butter.

So who should I be looking to get advice from? Would most tax consultant/advisors know this stuff or do I need to go to a more specialist tax consultant/advisor?

dogsears

redbeaard wrote: »

It did certainly seem like the accountant hired by the solicitor knew surprisingly little about Agri Relief considering that this is a very rural location and this type of stuff should be their bread and butter.

So who should I be looking to get advice from? Would most tax consultant/advisors know this stuff or do I need to go to a more specialist tax consultant/advisor?

Most tax consultants would/should know about this and you should probably get to see one asap.

redbeaard

dogsears wrote: »

Most tax consultants would/should know about this and you should probably get to see one asap.

Will do, cheers!