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Selling the Family Home ....

  • 22-09-2020 2:40pm
    #1
    nonsheep7
    Registered Users, Registered Users 2 Posts: 42 ✭


    Having inherited the family home and coming under Category A (i.e fitting all the criteria i.e principal residence etc) I believe i am exempt from CAT as the house is valued at <335,000.The question I am having a problem finding an answer to though is as follows: Should I wish to sell the house after the 6 year period and the house fetches say 400,000 ,what is my CGT tax liability then ? I initially assumed it was 33% of 65,000 i.e 21,450, however another part of me says it is taxed on the amount over the auctioneer valuation at the time of probate which was 290,000 which would be 33% of 110.000 i.e 36,300,quite a saucy difference of 14,850. I hope I have posted in the right place and thanks in advance for any help on this question.


Comments

  • #2
    hometruths
    Registered Users, Subscribers, Registered Users 2 Posts: 6,347 ✭✭✭hometruths


    nonsheep7 wrote: »
    Having inherited the family home and coming under Category A (i.e fitting all the criteria i.e principal residence etc) I believe i am exempt from CAT as the house is valued at <335,000.The question I am having a problem finding an answer to though is as follows: Should I wish to sell the house after the 6 year period and the house fetches say 400,000 ,what is my CGT tax liability then ? I initially assumed it was 33% of 65,000 i.e 21,450, however another part of me says it is taxed on the amount over the auctioneer valuation at the time of probate which was 290,000 which would be 33% of 110.000 i.e 36,300,quite a saucy difference of 14,850. I hope I have posted in the right place and thanks in advance for any help on this question.

    The other part of you is right. As far as CGT is concerned your acquisition “cost” is the probate value of 290k.

    But if you have been living in it as your principal residence it is exempt from CGT anyway.


  • #3
    Spanish Eyes
    Registered Users, Registered Users 2 Posts: 16,059 ✭✭✭✭Spanish Eyes


    Are you claiming Dwelling House Exemption, i.e. you have lived there as PPR for at least three years in the main or only home of the deceased person, and have no interest in any other dwelling? If so you are exempt from CAT on the value of the house.

    You must continue to live there for at least six years and if you sell it after that there is no CGT as it was your PPR. More information here...

    https://www.revenue.ie/en/gains-gifts-and-inheritance/cat-exemptions/exemption-for-dwelling-house/index.aspx


  • #4
    DubCount
    Registered Users, Registered Users 2 Posts: 1,094 ✭✭✭DubCount


    OP. The base cost for CGT purposes is 290k. If you have lived in the property as your PPR from the time you inherit to the time you sell, you get a full exemption from CGT. If you have only used the property as your PPR for some of the time, and have a different PPR for some of the time, the the total gain is prorated between the period it was your PPR and the period it wasnt. There are some outlying rules around this, so get some advice from an accountant if this is the case.


  • #5
    nonsheep7
    Registered Users, Registered Users 2 Posts: 42 ✭nonsheep7


    Thank you all for the information and your time ,apologies but the answers are still a little unclear ,Capital acquisitions tax and Capital gains tax appear to be 2 separate entities, the actual selling of the family home after the 6 years is where my confusion lies as regards the original question..


  • #6
    hometruths
    Registered Users, Subscribers, Registered Users 2 Posts: 6,347 ✭✭✭hometruths


    nonsheep7 wrote: »
    Thank you all for the information and your time ,apologies but the answers are still a little unclear ,Capital acquisitions tax and Capital gains tax appear to be 2 separate entities, the actual selling of the family home after the 6 years is where my confusion lies as regards the original question..

    Put simply based on the info and the original question in the OP - if you sell the house, after 6 years of living in it, for 400k or 4 million your CGT liability is zero.


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