Question on CGT

L

larrymo

Guest
Hi everyone

Quick question on CGT. My wife and I bought an investment property in 2004. We are now in a position where we could sell our principal residence and live in the investment property as our principal residence for a year before eventually moving to the U.S.A. for good (I'm an American citizen).

My question is this, I know I won't have to pay CGT on principal house when I sell it but will I be eligible for CGT on the investment property after I live in it for a year or so as my primary residence? We bought the investment property for Euro 435K (including stamp duty, etc.) and the houses are going for approx Euro 700K now.

If I am eligible for CGT on 2nd property, anyone have any idea how I can reduce this bill?

Thanks for any input here!!!


Larmo
 
They will make an allowence for the period that you lived there but you will have to pay CGT on the bulk of the profit at 20%. There will also be a multiplier depending on the time that you have owned it but someone else will be able to calculate this for you.
 
You will be liable to CGT on 2/3 of gain

You can off set stamp duty, legal (buying & selling) and auctioneers (selling) expenses

Sale of property say 750

Cost of property 435 K
Legal and auctioneers exps say 15K

Gain 300K

Gain liable to CGT 200K

less annual allowance 1,270 assuming no other profit on gains (sale of shares etc)

Tax @ 20% = 39,746
 
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