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Tax on compensation for moving commercial premises

  • 18-08-2017 12:06pm
    #1
    One_Of_Shanks
    Closed Accounts Posts: 2,436 ✭✭✭


    Hoping someone can help me here as even my accountant seems less than completely certain....

    Basically family business in same premises for approx 30 years but landlord selling to property developer and wants us out.
    So..... we're negotiating compensation for agreeing to move. No lease in place for the last 28 years or so.

    If they pay us a certain sum to move, is that sum then liable for tax? And if so, at what rate?

    Thanks in advance :)


Comments

  • #2
    Heisenburg81
    Closed Accounts Posts: 322 ✭✭Heisenburg81


    One_Of_Shanks wrote: »
    Hoping someone can help me here as even my accountant seems less than completely certain....

    Basically family business in same premises for approx 30 years but landlord selling to property developer and wants us out.
    So..... we're negotiating compensation for agreeing to move. No lease in place for the last 28 years or so.

    If they pay us a certain sum to move, is that sum then liable for tax? And if so, at what rate?

    Thanks in advance :)

    Payments as compensation for the limits on a profit making aparatus are capital I believe.


  • #3
    Squatter
    Closed Accounts Posts: 1,841 ✭✭✭Squatter


    Compensation for Capital Losses

    The main examples under this heading are:


    ...................................

    Compensation for the surrender or forfeiture of rights.

    ..........................

    These capital sums will be liable to Capital Gains Tax and treated as if there was a disposal of the asset.


  • #4
    Heisenburg81
    Closed Accounts Posts: 322 ✭✭Heisenburg81


    Squatter wrote: »
    Compensation for Capital Losses

    The main examples under this heading are:


    ...................................

    Compensation for the surrender or forfeiture of rights.

    ..........................

    These capital sums will be liable to Capital Gains Tax and treated as if there was a disposal of the asset.

    So in a case like this the entire proceeds are a gain?


  • #5
    barneystinson
    Registered Users, Registered Users 2 Posts: 4,685 ✭✭✭barneystinson


    Heisenburg81 wrote: »
    So in a case like this the entire proceeds are a gain?

    Well what could the base cost be?


  • #6
    Heisenburg81
    Closed Accounts Posts: 322 ✭✭Heisenburg81


    barneystinson wrote: »
    Well what could the base cost be?

    Nil Barney, nil.
    Thought you would have twigged that.


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  • #7
    barneystinson
    Registered Users, Registered Users 2 Posts: 4,685 ✭✭✭barneystinson


    Heisenburg81 wrote: »
    Nil Barney, nil.
    Thought you would have twigged that.

    Well you asked the question!

    If there's nil base cost and the proceeds are capital then it has to be all gain...


  • #8
    Heisenburg81
    Closed Accounts Posts: 322 ✭✭Heisenburg81


    barneystinson wrote: »
    Well you asked the question!

    If there's nil base cost and the proceeds are capital then it has to be all gain...



    Any suggestions in relation to the "query on undervalued assets" post?


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