Capital gains

Auds22002

Hi I sold my house for 8 grand profit have to do my capital gains, what expenses can I take off, auctioneer fees, solicitors, can I minus solicitors fee from when I purchased it too? Also I lived in it for 7 years does that create any exemption, does the fact that my original deposit was my savings make any difference either? My tenant didn't pay rent for a yr either solicitor fees cost 5000 to get him out too, really never made any profit? Any tips appreciated

tanit

Auds22002 wrote: »

Hi I sold my house for 8 grand profit have to do my capital gains, what expenses can I take off, auctioneer fees, solicitors, can I minus solicitors fee from when I purchased it too? Also I lived in it for 7 years does that create any exemption, does the fact that my original deposit was my savings make any difference either? My tenant didn't pay rent for a yr either solicitor fees cost 5000 to get him out too, really never made any profit? Any tips appreciated

The unpaid rent and solicitor's fees for the issue is income tax. Nothing to do with capital gains tax

From the selling price you deduct the selling expenses (solicitor's fees and the like) You add the purchase expenses (again solicitor's fees and the like to the purchase price) to the purchase price. Depending on when you bought the house purchase expenses and other capital investment may avail from indexation relief.

You deduct the final net purchase cost from the net sale cost from above and that's your profit.

If you lived in the house and it was your primary residency for the year's you were living and the last one you can get PPR relief. The profit is apportioned between the years you rented and the years that can avail from PPR relief and the part corresponding to the PPR is disregarded.

This might be better explained by an accountant or tax practitioner and they will be able to make all the calculations and submit the return for you and I would recommend you to do it that way if you are not very sure of what you are doing as there are other issues like when you need to pay preliminary CGT and when to file the return.

IHTH

Squatter

(As stated by tanit)


A liability to capital gains tax (CGT) arises when the proceeds (less costs of sale) are greater than the original purchase price (plus purchase costs, adjusted for inflation if purchased pre 2003). CGT is levied on the gain at a current rate of 33 per cent.

An individual’s principal private residence (PPR) is exempt from CGT if the individual has used the house as their PPR throughout the period of ownership.

Where an individual has not occupied the house as their PPR during the entire ownership, then they may partially avail of PPR relief on a pro rata basis. The portion of the gain exempt under PPR is calculated by taking the number of complete years the house was occupied as your home (including a deemed occupancy of the last 12 months before sale) over the total number of years of ownership.

If you have more than one PPR on which you could avail of the relief then you should notify the Inspector of Taxes which house you wish to have regarded as your PPR.

The fact that you purchased your house using your savings isn't a factor in calculating the amount of CGT due.

Suffering Jbox

I am selling a strip of land to my neighbour for 10K. I have been advised that no CGT is due as the sale would not reduce the value of my property. The CG1 return does not seem to cater for this scenario. Any advice on how I should inform Revenue would be greatly appreciated. Thanks in advance.

barneystinson

Suffering Jbox wrote: »

I am selling a strip of land to my neighbour for 10K. I have been advised that no CGT is due as the sale would not reduce the value of my property. The CG1 return does not seem to cater for this scenario. Any advice on how I should inform Revenue would be greatly appreciated. Thanks in advance.

I hope you weren’t told that by someone whose job is dealing with other people’s tax returns because that’s nonsense

It may well be exempt from CGT but not for the reason stated.

Is this strip of land a part of the site on which your house stands? If so, have you lived there throughout your period of ownership of the property?

Suffering Jbox

Hi Barney,
Yes,it is. It is primary residence (only residence!). It is family home and have there all my life.

barneystinson

Suffering Jbox wrote: »

Hi Barney,
Yes,it is. It is primary residence (only residence!). It is family home and have there all my life.

Ok, and what is the total size of the site on which the house is standing, including this strip??

Suffering Jbox

it is .45 of an acre. The strip is 30 square metres.

Calahonda52

Suffering Jbox wrote: »

I am selling a strip of land to my neighbour for 10K. I have been advised that no CGT is due as the sale would not reduce the value of my property. The CG1 return does not seem to cater for this scenario. Any advice on how I should inform Revenue would be greatly appreciated. Thanks in advance.

Wrong
You are disposing of an asset so CGT may apply.
Who is paying the legals on getting the LR maps sorted?
If its him, you need to check you don't get ....

Suffering Jbox

Calahonda52 wrote: »

Wrong
You are disposing of an asset so CGT may apply.
Who is paying the legals on getting the LR maps sorted?
If its him, you need to check you don't get ....

Hi, yes, the other side are paying the legal costs including land registry costs. What should I be careful of?

Suffering Jbox

barneystinson wrote: »

Ok, and what is the total size of the site on which the house is standing, including this strip??

Hi Barney, it is 0.45 acres. The strip is 30 square metres. Great if you could give a view. Thanks.

davindub

Suffering Jbox wrote: »

Hi Barney, it is 0.45 acres. The strip is 30 square metres. Great if you could give a view. Thanks.

I would say you are possibly looking at capital gains of the sale price less mv of non development land in the area at the time of purchase, e.g. if rural agri land...

If the value of your home were affected or the sale qualified for a relief (eg transfer a site relief), it may be different, but best thing to do is book an appointment with a chartered tax advisor.

barneystinson

Suffering Jbox wrote: »

Hi Barney, it is 0.45 acres. The strip is 30 square metres. Great if you could give a view. Thanks.

Based on the information you’ve given, the disposal would be exempt from CGT as it is a disposal of part of your Principal Private Residence.

https://www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-19/19-07-03.pdf
Paragraph 3.4
Garden and land
Where part of the garden or grounds is disposed of but the house is retained, exemption is available if the total area of land occupied with the house is not more than one acre. If the total area of land before the sale was more than one acre, the sale of part of the land should be regarded as prima facie evidence that such land in excess of one acre was not required for the reasonable enjoyment of the residence (see Par. 3). Exemption is only to be denied in respect of a gain on the disposal of any land in excess of one acre. For instance, relief should be refused altogether to an individual selling half an acre out of a garden of 21⁄2 acres but only to the extent of one-quarter of an acre to an individual selling half an acre out of a garden of 11⁄4 acres.


You should of course get advice from a tax advisor to confirm your position.

Suffering Jbox

Much appreciated Barney. Thanks.