Avoiding CGT on Investment property

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FillSpectre

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A friend of mine was thinking that they may sell their old investment property and buy two new ones. THe older property is old and requires a lot of maintenece hence he wants to sell to get less work.

He is worried about CGT as he it would be over €120k. He is under the beleif that if he moves out of his home, rents that out and moves into the investement property he will be able to claim that as his residence. He is then free of CGT if he stays a year before selling is his belief. Is this right?

I thought there was a way of selling your assets to reinvest without paying CGT is there?
 
FillSpectre said:
He is under the beleif that if he moves out of his home, rents that out and moves into the investement property he will be able to claim that as his residence. He is then free of CGT if he stays a year before selling is his belief. Is this right?
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No


I thought there was a way of selling your assets to reinvest without paying CGT is there?
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No
 
FillSpectre said:
He is worried about CGT as he it would be over €120k.
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Is he making over 600,000 profit on the sale. has indexation been used to calculate the CGT.
 
Thanks for the explanantion. :rolleyes:

Anybody else replying, could you actually explain how the residency clause won't apply. As far as I can see you don't pay CGT on your home and residency does appear to only require a year of living there. It sounds too simple to me but does anybody know more and willing to explan it?
 
FillSpectre said:
Thanks for the explanantion. :rolleyes:
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Sorry for disappointing you, but you didn't ask for an explanation.

I could :rolleyes: myself every time someone asks a question here that already has been answered many times - especially as it is very easy to find these answers by using the Search facility.
 
ubiquitous said:
Sorry for disappointing you, but you didn't ask for an explanation.
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I also didn't ask anybody to blunt,rude or ignornat but you felt that was what I wanted.
ubiquitous said:
I could :rolleyes: myself every time someone asks a question here that already has been answered many times - especially as it is very easy to find these answers by using the Search facility.
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I used search and haven't found anything. I wanted information if you don't want to help just go away. NO. NO is of no help. Thank you but no thank you for any further help from you is needed or wanted.
 
CCOVICH said:
You cannot have more than one PPR ('home') at any given time.
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That is why he plans on renting out his current home when living in his current rental. Sorry if that wasn't clear
 
from the tax office

"The exemption is also restricted where the taxpayer has not lived in the house for long periods.
However, a period of up to twelve months immediately before the end of the period of ownership is
treated as a period of occupation even though the owner may not have been actually living in it during
that period."

THis is the bit my firend believes means he can become exempt from CGT if he lives there for a 1 year and rents his other house

on page 15

http://www.revenue.ie/leaflets/cgt1.pdf
 
FillSpectre said:
from the tax office

"The exemption is also restricted where the taxpayer has not lived in the house for long periods.
However, a period of up to twelve months immediately before the end of the period of ownership is
treated as a period of occupation even though the owner may not have been actually living in it during
that period."

THis is the bit my firend believes means he can become exempt from CGT if he lives there for a 1 year and rents his other house

on page 15

http://www.revenue.ie/leaflets/cgt1.pdf
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If you read the entire section on PPR relief in that leaflet carefully you will see that this is a non-runner.
 
CCOVICH said:
If you read the entire section on PPR relief in that leaflet carefully you will see that this is a non-runner.
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I have and I still am tending to agree with my friend. What are you exactly saying means he won't qualify? Section 5 seems to cover the residency are you talking about somewhere else?
 
In conclusion Fillspectre you cannot Legally avoid paying CGT on an investment property if you make a capital gain. The legislation on PPR relief is plugged very tightly to ensure it is not abused

On a second point do you not consider it fair that an investor should pay CGT if he/she makes a gain....when FTB's are struggling to get on the ladder as the bubble grows and grows due to speculators with substantial purchasing power
 
bazermc said:
In conclusion Fillspectre you cannot Legally avoid paying CGT on an investment property if you make a capital gain. The legislation on PPR relief is plugged very tightly to ensure it is not abused

On a second point do you not consider it fair that an investor should pay CGT if he/she makes a gain....when FTB's are struggling to get on the ladder as the bubble grows and grows due to speculators with substantial purchasing power
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In conclusion from what? I am not aware of anybody actually clarifying the situation when did that happen?

Nobody really mentioned the second issue. Which I believe is possible through reinvestement but only appears to off put CGT untill later

On your point I didn't ask for a moral judgement plus what how does CGT paid by my friend help FTBs?
 
FillSpectre said:
I thought there was a way of selling your assets to reinvest without paying CGT is there?
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I'm not sure if it still exists, but what you are referring to is rollover relief, and it would have only have extended to assets used in the course of a trade or profession, not to investment properties.
 
FillSpectre said:
Nobody really mentioned the second issue. Which I believe is possible through reinvestement but only appears to off put CGT untill later
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I actually answered this for you, and told you that reinvestment relief (technically called rollover relief) is NOT available, but instead of reading my reply you attacked me for being "blunt,rude & ignorant" :rolleyes:
 
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