Selling an investment property - Solicitor has made strange request

Says Aron

Hi

Myself and my ex bought our property in2004 and moved out of it after the breakdown of our relationship in 2010. It has been rented ever since and finally we have reached the end of the fixed interest period with the bank and have put it up for sale. We have accepted an offer. I now live overseas in Australia since 2012 where I am a resident for tax purposes.
With relation to the sale, the solicitor had asked for a tax clearance certificate from the Revenue which I supplied. He's then sent me an email stating as follows:
"While I have received your tax clearance certificate you have provided before we can release the net sale proceeds to you we will require a letter from the  Revenue Commissioners confirming that they are satisfied with you tax position and that they do not propose to carry out an audit. This would entail insuring that there is no CGT liability. It would appear that you acquired the property in 2004 for a price of EUR279,500, so accordingly there is CGT liability".
(I've typed that word for word - shocking lack of detail on punctuation from a solicitor, but whatever...)

Anyway, my questions are what is this bloke actually on?
I have asked my accountant about the letter and she says that she has never heard of the Revenue issuing such a letter, and they are unlikely to agree to this as they can audit returns at any time if they receive information to suggest you have not done the right thing.
Also, the house is selling for EUR272K, which is less than the original purchase price, so there is no CGT liability.

Other than getting a new solicitor (which is not really an option), does anyone have some advice?

Cheers,
Says Aron

Victor

Note that just because there is no liability in respect of this property, there may be an outstanding liability in respect of other assets. This may be what they are hinting at.

kaymin

You're non-resident so there are additional rules to ensure you don't evade tax - it's alot more difficult for the revenue commissioners to chase you for non-payment you when you're out of the country

Says Aron

Thanks folks, appreciate your time. There are no other assets.
Understand the non resident piece, but shouldn't the tax clearance certificate satisfy that?
Also there is no CGT, it's selling for less than it was bought for. The rent didn't cover even the 75% of the claimable interest when it was rented. So it's always operated at a loss.

I guess the question really is what do I do about a letter the solicitor apparently needs to release my funds to me, but the accountant is saying is not attainable?
Is this some sort of standard request for non residents?
Thanks again!

thegolfer

Says Aron wrote: »

Thanks folks, appreciate your time. There are no other assets.
Understand the non resident piece, but shouldn't the tax clearance certificate satisfy that?
Also there is no CGT, it's selling for less than it was bought for. The rent didn't cover even the 75% of the claimable interest when it was rented. So it's always operated at a loss.

I guess the question really is what do I do about a letter the solicitor apparently needs to release my funds to me, but the accountant is saying is not attainable?
Is this some sort of standard request for non residents?
Thanks again!

Did one of these two months back.

You'll need a CGT return with any payment done for 2017, and submitted to revenue. At the same time request a letter of no audit, which Revenue will write back indicating they will not audit you at a later point. They'll issue this if all, income tax and cgt looks in order.

May take 4 weeks to get a response.

Says Aron

So I need to do a CGT return even though there is no gain, it's a capital loss?
Thank you

Victor

Says Aron wrote: »

Thanks folks, appreciate your time. There are no other assets.
Understand the non resident piece, but shouldn't the tax clearance certificate satisfy that?
Also there is no CGT, it's selling for less than it was bought for. The rent didn't cover even the 75% of the claimable interest when it was rented. So it's always operated at a loss.

Make sure this loss (trading and CGT) is recorded, so you can off-set it against future profits, in case you ever come back.

J.Ryan

Says Aron wrote: »

So I need to do a CGT return even though there is no gain, it's a capital loss?
Thank you

You always need to do a CGT return, Revenue will argue that they have no evidence of a loss without a submitted return.

thegolfer

Says Aron wrote: »

So I need to do a CGT return even though there is no gain, it's a capital loss?
Thank you

That's correct.

Normally a disposal in 2017, you do a CGT Return in 2018.

However in these situations you do CGT return today, being a condition of Revenue providing the no audit letter.

Loss or Gain, you do a return.

Says Aron

Thanks, much appreciated.