Is tax due on CPO payment?

DOC40

Hi,

Can anyone tell me if I would be due to do a tax return on a CPO payment which I'am expecting in the next few weeks.

The compulsory Payment order is for part of my lane coming up the front of my house which is going to be widened in the near future.

I have heard that I would be due to pay tax but also have heard that tax is not due as the part taken away is part of my home residence.

Thanking you.

Carawaystick

DOC40 wrote: »

Hi,

Can anyone tell me if I would be due to do a tax return on a CPO payment which I'am expecting in the next few weeks.

The compulsory Payment order is for part of my lane coming up the front of my house which is going to be widened in the near future.

I have heard that I would be due to pay tax but also have heard that tax is not due as the part taken away is part of my home residence.

Thanking you.

Your principle primary residence is exempt from cgt if the lane is part of this its exempt

Land sale would be a capital gain. Any tax due would be on the difference between the price when you aquired the land and the sale price, not the whole price. Then there was indexation to allow for inflation

I think cgt is due next year, I.e. The October of the year after you make the gain. I'd say no tax is due until after you have the money

The rate is 33% see how much paid for advice the price will cover
Ask your solicitor about the ppr bit, they should be definitive on that

DOC40

Carawaystick wrote: »

Your principle primary residence is exempt from cgt if the lane is part of this its exempt

Land sale would be a capital gain. Any tax due would be on the difference between the price when you aquired the land and the sale price, not the whole price. Then there was indexation to allow for inflation

I think cgt is due next year, I.e. The October of the year after you make the gain. I'd say no tax is due until after you have the money

The rate is 33% see how much paid for advice the price will cover
Ask your solicitor about the ppr bit, they should be definitive on that

The part they are taking is some of my lane leading to my principle residence alright so should I be exempt from CGT?

I bought my site and built a house on it 9 years ago but I'am getting contrasting views on whether or not I have to pay tax on the compensation I will receive.

Thanks for help.

Peregrinus

Basically, the tax treatment of CPO proceeds is the same as the tax treatment that would apply to sale proceeds, if you voluntarily sold the property.

Generally, there'll be no liability to income tax. There may be a liability to capital gains tax, if you have made a gain, and if the property sold is not exempt, and if you have no losses from previous disposals to carry forward, etc.

Generally, a gain on the disposal of your principal private residence (or part of it) is exempt. In this case, if the property is part of a lane that gives access to your residence and nowhere else, you should be OK. But if it gives access, e.g., to your residence and to the farm you work, there may be a libility.

If in doubt, talk to an accountant or a lawyer.

DOC40

Peregrinus wrote: »

Basically, the tax treatment of CPO proceeds is the same as the tax treatment that would apply to sale proceeds, if you voluntarily sold the property.

Generally, there'll be no liability to income tax. There may be a liability to capital gains tax, if you have made a gain, and if the property sold is not exempt, and if you have no losses from previous disposals to carry forward, etc.

Generally, a gain on the disposal of your principal private residence (or part of it) is exempt. In this case, if the property is part of a lane that gives access to your residence and nowhere else, you should be OK. But if it gives access, e.g., to your residence and to the farm you work, there may be a libility.

If in doubt, talk to an accountant or a lawyer.

Thanks for the help. I did speak to an accountant who is just going to work out what tax to pay on the CPO without considering that I may be exempt.
It's only when I got talking to a few other locals who say that when it's part of just your own place of residence that you should be exempt.

I just would hate to think that revenue would come looking for a payment sometime in the future and would be happy just to pay the tax on it when the payment cones provided I'am due to pay it.

Carawaystick

Have you not got a solicitor for the transfer of land?
cpo should pay for the solicitor cost ( over and above the land sale)