CGT: roughly how much?

M

Muffinb

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Please help, need rough idea as planning to sell but will hang on to it if its not worth it in currewnt market as mortgage is covered but would love to release equity to reduce PPR mortgage...

Bought house Sept 1998 for 150Keuro, PPR till July 2004
Rented from July 2004 ( worth then I suppose 340K) till Jan 2008.
House and site beside it now worth about 600K ( site value on its own estimated at 200K if that matters..)

Roughly what is the CGT and how do you work it out, I cant figure out some of the OP's calculations, not great with maths...:confused:

Thanks
 
Muffinb said:
Bought house Sept 1998 for 150Keuro
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You can index the acquisition price for inflation for CGT purposes up to c. 2003. See www.revenue.ie for details of how to do this and the multipliers that apply.
Rented from July 2004 ( worth then I suppose 340K)
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Valuation at this point is irrelevant.
Roughly what is the CGT and how do you work it out, I cant figure out some of the OP's calculations, not great with maths...:confused:
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Let's assume you sell it in September 2008. That means 10 year's ownership with approximately 6 as PPR and 4 rented out which means that c. (4-1)/10 = 3/10 =~ 33% of any total gain is assessable for CGT at 20%. I am just using rough calculations here but hopefully you get the gist. For CGT you can offset certain expenses and allowances too.

You should get professional advice when preparing your CGT return.
 
Oh thats great help Clubman, so am I right in working this out that If I sell for 600K after buying for 150K then 33% of 450K profit= 148,500K is liable at 20%= 29,700K very roughly obviously not taking into account any expenses etc???


If this is correct , not as bad as I had initially thought...am I right?
 
Muffinb said:
If I sell for 600K after buying for 150K then 33% of 450K profit= 148,500K is liable at 20%= 29,700K very roughly obviously not taking into account any expenses etc???
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Very roughly - yes. You have not allowed for indexation of the acquisition price, allowable expenses etc. but that's the rough gist. The renting of a former PPR means that some portion of the total gain during the ownership of the asset is assessable for CGT. Some people mistakenly think that the valuation of the property at the time that it was first rented out is relevant. It's not.
 
ClubMan said:
You can index the acquisition price for inflation for CGT purposes up to c. 2003. See www.revenue.ie for details of how to do this and the multipliers that apply.
Valuation at this point is irrelevant.
Let's assume you sell it in September 2008. That means 10 year's ownership with approximately 6 as PPR and 4 rented out which means that c. (4-1)/10 = 3/10 =~ 33% of any total gain is assessable for CGT at 20%. I am just using rough calculations here but hopefully you get the gist. For CGT you can offset certain expenses and allowances too.

You should get professional advice when preparing your CGT return.
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Is 3/10 not 30%
 
Sorry - 20%. :eek: As I said my figures were rough and ready - and in this case inaccurate. But I presume that the original poster gets the general gist.
 
Just shows you all how crap my maths are when I didnt spot that 3/10 is 30% and not 33% but general gist gotten alright!! Clubman I suppose you meant 30% and not 20% in the last post...

Thanks again for the help, I am going to seek accountant advise of course once I can find one I can trust....
Last one returning form for me for 2006 told me I owed 3600 for me to query it and be told my original estimation of 700 was correct half an hour later ( ..... and thats with my crap brain...) needless to say Im not asking him to return for 2007...:p
 
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