Capital Gains Tax question

roast222

A friend purchased a 50% share in a house 20+ years ago from her brother and she has lived in the house ever since.

When her brother died in 2011 he left his 50% share to my friend, her sister and her other brother (1/6th each). The property was valued at €160k then.

The house was subsequently sold in 2017 for €255k. She has lived in the property since purchasing her 50% share and right up until the date of disposal.

I'm presuming there is PPR relief on the 50% share since she lived in the property since she bought it?

Are there any CGT implications on the inherited 1/6th share?

there would be Capitlal Acquisitions Tax on the 1/6 shares imo?

http://www.citizensinformation.ie/en/money_and_tax/tax/capital_taxes/capital_acquisitions_tax.html

not a relation so the tax-free relief amount is
Group C: €16,250 Applies in all other cases.

so (255k/6)- 16250 = 26250 is the amount to pay CAT (33%) on = 8662.5 tax

roast222

glasso wrote: »

there would be Capitlal Acquisitions Tax on the 1/6 shares imo?

http://www.citizensinformation.ie/en/money_and_tax/tax/capital_taxes/capital_acquisitions_tax.html

not a relation so the tax-free relief amount is
Group C: €16,250 Applies in all other cases.

so (255k/6)- 16250 = 26250 is the amount to pay CAT (33%) on = 8662.5 tax

The 1/6 share was from her brother so presumably it is group B in that instance and below the threshold hence no CAT?

It is the potential CGT implication on the 1/6th share that was gifted from her brother that I was more curious about...

roast222

roast222 wrote: »

The 1/6 share was from her brother so presumably it is group B in that instance and below the threshold hence no CAT?

It is the potential CGT implication on the 1/6th share that was gifted from her brother that I was more curious about...

ok yeah I forgot that the brother died in 2011 so they would have sorted out CAT according to the reliefs at the time.
I imagine that there would be CGT then yes on the appreciation of 160k value at time of death to the sale price of 255k scaled back to 1/6th.

(255/6) - (160/6) * CGT rate.

of course technically the sister could have been subject BIK on living in a house for all that time when she only owned 1/2 (if he wasn't living there also)!

she would have had no CAT as she purchased the 50% share (assuming this was legally documented).

Lockedout2

It's CAT not BIK for the free use of property.

Bold Abdu

Your friend will have a NIL CGT liability. Full PPR would apply to her 4/6 of the property.

The other brother and sister may have a CGT liability, assuming they didn't live in the house.

scheister

glasso wrote: »

of course technically the sister could have been subject BIK on living in a house for all that time when she only owned 1/2 (if he wasn't living there also)!

I know its CAT not BIK. not sure would Revenue bother chasing this. It would be hard to get a value on the gift. Half market value would not be fair as her owning the half would alter this as the property would not be on the open market to start with

exaisle

scheister wrote: »

I know its CAT not BIK. not sure would Revenue bother chasing this. It would be hard to get a value on the gift. Half market value would not be fair as her owning the half would alter this as the property would not be on the open market to start with

Interesting question though. I'd have thought that CAT would only arise if she had use of the property and didn't own any of it....

Anybody got a definitive answer on this?

momo98

does anyone know how CGT with online brokerage accounts works
like if you sell the stock but the money is still in your online brokerage account do you pay tax on it yearly or just as soon as you transfer the funds to an irish bank

Geuze

momo98 wrote: »

does anyone know how CGT with online brokerage accounts works
like if you sell the stock but the money is still in your online brokerage account do you pay tax on it yearly or just as soon as you transfer the funds to an irish bank

You pay CGT on the gain made on the disposal of an asset.

Where you leave the proceeds of the sale is not relevant.

Where you live is relevant.

momo98

what I meant was in the case of an online broker is "disposal" of an asset when you sell the stock and debit the online account or is it when you transfer the funds to your bank .

exaisle

momo98 wrote: »

what I meant was in the case of an online broker is "disposal" of an asset when you sell the stock and debit the online account or is it when you transfer the funds to your bank .

It's when you sell your stock. It doesn't matter when the funds are transferred.