Calculating CGT with multipliers

Stheno

Hi everyone,

I'm going to consult a tax professional on this, but I'm wondering if anyone on here would have an opinion as to the formula I've used to calculate potential CGT due on the profits from a house sale?

The house was bought jointly in 1999 for £100000 (€127000)a deposit of £15000 was put down by seller a at the time, seller a was married to seller b at the time. They susequently seperated and seller b remained in the house.

the house is now for sale, and seller a is liable for cgt as since they do not reside there as their ppr but rent elsewhere (is there an exemption for CGT in this case as there is for NPPR?

The house is expected to be sold for approx. €250k with an outstanding mortgage of €75k

That leaves a "profit" of €175k which will be split jointly between a and b

Taking the original purchase price of €127000 into acccount, that then leaves 175-127/2 = €24000 which seller a will have to pay CGT on assuming the value of the outstanding mortgage is factored in when calculating CGT

However as the house was bought in 1999 multipliers of the original value apply at a factor of 1.193 which increases the value of the purchase price from €127000 to €151,511

This then reduces down the CGT to 175-151511/2 = 11,744 CGT due by seller a.

Have I got those calculations right with the following assumptions?

The CGT is due on the difference between the original purchase price and the new sold price, minus the outstanding mortgage?
CGT is due by seller a due to their not having used the house as their PPR for a period of time while still paying the mortgage due to a marriage breakdown?

TIA

nompere

Advice on property taxation isn't permitted in this forum, and you should consult a professional.

As a general principle, the gain on a disposal is calculated by deducting the indexed cost of an asset from the sales proceeds.

Borrowings don't come into the calculations.

Geuze

Mortgage is not relevant, ignore.

Stheno

nompere wrote: »

Advice on property taxation isn't permitted in this forum, and you should consult a professional.

As a general principle, the gain on a disposal is calculated by deducting the indexed cost of an asset from the sales proceeds.

Borrowings don't come into the calculations.

Geuze wrote: »

Mortgage is not relevant, ignore.

Many thanks to you both, as I said I'll be consulting a professional as I'm self employed so may divert some of the proceeds to a pension to minimise the tax

Thank you both.

Mod if appropriate please close this thread, I didn't realise it was not permitted to ask for property taxation advice.

nompere

Stheno wrote: »

Many thanks to you both, as I said I'll be consulting a professional as I'm self employed so may divert some of the proceeds to a pension to minimise the tax

Thank you both.

Mod if appropriate please close this thread, I didn't realise it was not permitted to ask for property taxation advice.

You won't get pension relief on capital gains.

Stheno

nompere wrote: »

You won't get pension relief on capital gains.

I'll get pension relief by investing the net profit.

So I'll get 40% relief after paying 33%

nompere

But only if you have enough income to pay that level of pension premium.

I do understand that the gain will help with cash-flow when paying the premium.