What valuation date is taken for CGT purposes ? Date of Death or Date Probate is granted?

maccoscair · 06-07-2022 12:07PM #1

The situation relates to a field that belonged to my late grandfather.

He purchased the field in 1936 and died in November 1971. However before his death he had signed his house and lands over to his eldest son apart from 1 small field that was still in his name at the time of his death.

However probate was never taken out on his estate until November 1999 and the field was only sold last Christmas. This was due to the family not being able to agree what to do with the field and has been a family headache for nearly fifty years.

I am aware that for a property bought before 6th April 1974 you take a market value of the field at that date, but as this was already after his date of death do you take the value of the property to be the value that was given to the field at the time probate was taken out, as it was so long after the date of death?

The difference between the two figures would be significant as would the tax that would need to be paid thereon.

Any help would be appreciated as we just want to get the whole issue laid to rest properly.

Thank you.

Marcusm · 11-07-2022 07:22PM

There was no CGT in Ireland prior to the implementation of CGT Act 1975. For chargeable disposals of property held prior to the introduction of the tax, the market value at 6 April 1974 was substituted for the actual cost. Indexation (a measure of inflation) was available up until 2002 and this would constitute a significant multiplier (more than 5 times IIRC).

the question to be addressed is whether the beneficiary under The Will is treated as owning the property on 6 April 1975 or whether he had a beneficial interest in it under the will. This can only be assessed by the terms of the Will/Succession Act 1965.

Capital Acquisijtons Tax (inheritance and f gift taxes) was not introduced until 1976 so it’s deeming rules as regards an inheritance should not apply. It is a matter of succession law.

I suspect the answer is that by 6 April 1974 the beneficiary would have had an entitlement to sue the executor for the property. On this basis, I think he/she has a beneficial interest in the property before that date such that the 1974 valuation would apply but you need to recognise that this is a complex area!

What valuation date is taken for CGT purposes ? Date of Death or Date Probate is granted?

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