CGT & Dependent Relative Relief

derby7

The relief is:
Gains on the disposal of property owned by you (a house, apartment, etc.) which was occupied by you or by a dependent relative as a sole or main residence.

In what circumstances would the above relief not apply ?

Mr. Incognito

Property advice is banned - speak to a solicitor or tax advisor

derby7

Surely the Q above is not banned !! :eek:

Lockedout2

The problem is that you will get people who don't know what they are taking about giving advice which if incorrect could result in a significant liability to tax.

davindub

derby7 wrote: »

The relief is:
Gains on the disposal of property owned by you (a house, apartment, etc.) which was occupied by you or by a dependent relative as a sole or main residence.

In what circumstances would the above relief not apply ?

You would need to be a lot more specific, but in general the CGT relief is for your Principle private residence only, you cannot claim 2 PPR for the same periods. But best thing to do is get your accountant to work out the potential liability.

Lockedout2

davindub wrote: »

You would need to be a lot more specific, but in general the CGT relief is for your Principle private residence only, you cannot claim 2 PPR for the same periods.

This could be interpreted in a number of ways, in general.

davindub

Lockedout2 wrote: »

davindub wrote: »

You would need to be a lot more specific, but in general the CGT relief is for your Principle private residence only, you cannot claim 2 PPR for the same periods.

This could be interpreted in a number of ways, in general.

Such as?

Pawwed Rig

Ahhh the question is about PPR relief. Took me a few minutes to figure out whatwas going on here .

derby7

Thanks for the discussion folks, I just want to tease out what the relief is and how Revenue sees it and in what circumstances it does/doesn't apply.

Link to revenue document.

From the link above it states:
The relief is also available, under certain circumstances,
where the house has been occupied by a dependent relative.

3.22 Subsection (11) of Section 604 extends the scope of the relief available to an individual on the disposal of a residence (including a garden or grounds not exceeding one acre) which he or she had provided for use by a dependent relative. The requirements of Section 604 as regards periods of occupation and use of the premises by the relative apply as they would to an individual who was owner/occupier.

The term relative is not defined and it should be given its widest possible
meaning.
It is a condition of the relief that the dwelling-house must have been the sole
(not merely the main) residence of the relative. It is a further condition of the relief that the dwelling-house should have been provided gratuitously (rent free and without any other consideration).
It is a term of the relief that only one dwelling-house provided by a claimant
for a dependent relative can qualify at any one period of time.

The relief to be given, on a claim being made by the disponer, is such relief as would be given under Section 604 in respect of the dwelling-house and
grounds if the dwelling-house (or the relevant part thereof) had been the
disponers only or main residence during the period of residence by the
dependent relative.

Furthermore, any relief given under the subsection does not affect the relief
available to the disponer, under Section 604, in respect of his or her own
residence and is additional to any relief he or she could claim in respect of the house in question in respect of any period during which he or she lived in the house prior to its occupation by the dependent relative.

---

So if I give a what-if scenario, eg. a widowed mother & son, 50/50 % owners, where the son has taken out a mortgage to refurbish house but later gets married & moves out, he continues to pay mortgage in full. Unfortunately mother dies and now son is looking at CGT if he sells house.

Lockedout2

davindub wrote: »

Such as?

In general you can only claim PPR on one property in any given period but on occasion you can claim for two or possibly three for the same period.

davindub

You are talking about disporal of principle private residence rules here?

The only circumstance I could envisage as being perceived as claiming for two properties would be sale of a previous PPR with the assumed occupation period of 12 months at the end. Was that what you mean?

derby7

Yes it's PPR tax/relief we're talking about, but no, it's not the disposal of 2 properties.
Note, from the scenario above, it's not the person's (in this case the son's) PPR. He had moved out. He did half own the house. He now fully owns the house and is looking to sell, but wondering what CGT he has to pay.
He's wondering if the Dependent Relative's Relief mentioned above applies ?!

davindub

Yes the widowed mother/father counts as a dependant relative and half of the property will be covered by the exemption. But again this is in general, you need to actually get someone to calculate the tax liability for you, not just CGT but CAT on the transfer of half the property on the death of the mother as well.

derby7

Cheers, yep I was thinking the 50/50 split would come into it, as you say only 50% would apply for relief. I wasn't sure how the relief would be interpreted, ie. it doesn't specifically mention that the owner has to be a 100% owner.

/and of course the son should seek professional advice