Offsettinf capital loss on property sold abroad against future capital gains?

Bob24

I am in the process of selling a property abroad and will make a capital loss on it. Am I correct that the loss can be offset against any capital gain tax I am liable for in the future? (For reference I have been a resident of Ireland for the whole duration of ownership of the property).

And if yes, do I need to declare the loss to the revenue this year so that the amount is documented with them and available to me to offset in the future? Or is it just a matter of me allocating bits of it every year in the future with nothing to do related to the sale itself?

Also, I assume the answer is no but just to double check: can the legal fees and taxation associated to the purchase (solicitor’s fee, local equivalent of Irish stamp duty) be taken into account as part of the purchase price when calculating the loss?

dogsears

Yes*, yes, no and yes.


* unless you are domiciled outside Ireland, in which case no. If you need more information about domicile, say so.

Bob24

dogsears wrote: »

Yes*, yes, no and yes.


* unless you are domiciled outside Ireland, in which case no. If you need more information about domicile, say so.

Cheers. And yes I am in Ireland.

dogsears

Being resident in Ireland and being domiciled in Ireland are not necessarily the same thing. Are you originally Irish or do you anticipate somewhere other than Ireland being your long term home?

Bob24

dogsears wrote: »

Being resident in Ireland and being domiciled in Ireland are not necessarily the same thing. Are you originally Irish or do you anticipate somewhere other than Ireland being your long term home?

Cheers. I was not an Irish citizen when I purchased that property abroad (although I was a resident of Ireland), but I am now a naturalised Irish citizen. I also have been in uninterrupted full time employment here since 2006 and recently purchased a property in the State which will become my main residence in the next couple of weeks. No plan to go anywhere else for the time being.

I assume this makes me domiciled?

Also from your previous answer do I get it right that what I will need to do file a tax return online in early 2019 whereby I state the loss I have incurred from the sale in 2018?

dogsears

OK.  You are more than likely domiciled in Ireland but is not beyond doubt as these things are quite complex, for instance in your case the degree to which you continue to have links with your former country could be relevant etc.  As having the loss available to you could be quite valuable I think you should see a tax adviser where you can lay out all the facts and they can come to a more in depth analysis.  It seems to me that it would be worth the cost.  They can also go through your filing obligations with you.

Bob24

Ok thanks a lot!

Calahonda52

Bob24 wrote: »

I am in the process of selling a property abroad and will make a capital loss on it. Am I correct that the loss can be offset against any capital gain tax I am liable for in the future? (For reference I have been a resident of Ireland for the whole duration of ownership of the property).

And if yes, do I need to declare the loss to the revenue this year so that the amount is documented with them and available to me to offset in the future? Or is it just a matter of me allocating bits of it every year in the future with nothing to do related to the sale itself?

Also, I assume the answer is no but just to double check: can the legal fees and taxation associated to the purchase (solicitor’s fee, local equivalent of Irish stamp duty) be taken into account as part of the purchase price when calculating the loss?

You need to have all the calculations to hand, including proof of source of funds for the original purchase, as well as proof of receipt of proceeds.

You include the disposal in the relevant tax years tax return and the loss is carried forward from year to year.

I don't see the need for prof advice at this stage, its A-B=Minus C, if the domicile/etc issue gets raised then take prof advice

dogsears

Calahonda52 wrote: »

You need to have all the calculations to hand, including proof of source of funds for the original purchase, as well as proof of receipt of proceeds.

You include the disposal in the relevant tax years tax return and the loss is carried forward from year to year.

I don't see the need for prof advice at this stage, its A-B=Minus C, if the domicile/etc issue gets raised then take prof advice

It is not as simple as you say. OP will be responsible for the filing. If they are non-domiciled the loss is not allowable at all. So in order to know what to include in their filing they need to pin down the domicile position. That's why I'm suggesting they get advice.