# Help, am i being conned by my solicitor?



## coolatjc (17 Jun 2008)

Hi all, I have a question to ask,

Am I being conned by my solicitor?


I have been living in a home with my own family that was left to my brothers and sisters including me for the past ten years that was left to us by our late parents.

I  recently moved out with my familyto a new home and the decision was made by all of us to sell the family home as noone had any further need for it.

We sold the home 7 weeks back, the house exchanged documents and the keys have been handed over. No problems.

My Solicitor then paid the auctioneer and took his fees but then stopped before paying my brothers and sisters and me stating that he had to sort out Capital Gains Tax.!

Now im not sure if we do or dont have to pay this tax, the solicitor said he would look into it.  Eitherway 7 weeks have now passed, we no longer own the home and have yet to receive a single cent in any of the money.

Is this right?  Can my solictor withhold the money?  Ive asked him what is going on and he simply says he is sorting it out!

Am I being conned, what can i do legally?

Please help!!!!


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## mf1 (17 Jun 2008)

Very likely there is CGT payable. The solicitor may have a responsibility to Revenue for this if you do not pay it. 

However, he should have told you about this and worked through the likely figures with you in advance. 

So you need to check with him what is going on, what, if any,  CGT is payable  and, specifically, when you can expect payment of the balance. Do this in writing  and ask for him to come back to you within a specific time line. 

If he does'nt, then you could consider resporting him to the  Law Society although, as a practising solicitor, obviously, I think that should be a last resort. 

mf


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## coolatjc (17 Jun 2008)

thanks for the reply,

just one more question, is 7 weeks plus a reasonable time for my solictior to take to sort out CGT? Or is he just taking the mick making interest on the balance?

What sort of time scale does this normally take to sort out and pay CGT?


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## mf1 (17 Jun 2008)

I think you need to talk to your solicitor. 

It is quite a long time but then dealing with Revenue can take a long time. 

Really, this should have been brought up earlier. Perhaps it was. It is also highly unlikely that your solicitor is using  the money to make a shed load of interest. Most solicitors want shut of their clients and their clients money at the earliest possible opportunity, given the latest  round of solicitors' scandals which has led to a massive increase in Law Society audits. 

If you are using the same language ( conned, taking the mick, etc.,etc) to your solicitor, you may not be flavour of the month.  You should consider adopting a slightly less "offensive" ( as opposed to defensive) approach. 

mf


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## MandaC (17 Jun 2008)

Seven weeks is more than adequate time to work out a CGT liability.  

I concur with MF1.

There may also be returns for each member of the family to make.  Could it be perhaps the delay is that the Solicitor is arranging to have these drafted for each family member for signature? 

You wont know until you request clarification in writing.


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## coolatjc (17 Jun 2008)

Thanks all for your advice.  

Yes i am more PC with my solicitor and more careful on what language I use!
So I guess Ill write that letter and try to get some clarification.

Thanks again for you advice and help!


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## Treehouse (17 Jun 2008)

Isn't the house an inheritance and thus tax-free up to €381k?


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## Camry (17 Jun 2008)

I am not a lawyer, but this sounds very strange to me.

First, given you information, I don't see how you would have a CGT liability, given you describe this as your PPR.

Second, can any lawyers confirm whether it is the legally required practice in Ireland for a solicitor to assess tax liabilities. That sounds ridiculous and doesn't happen anywhere else I h know. For example, you aren't even required by law to use a lawyer for the transaction in the first place, moreover, how does this lawyer know what your CGT liability would be? He doesn't have all the information and it is you tax liability not his. 

And finally, if all this was above board, all this would have been addressed in advance of completion. 
I would go get some independent advice. Recent events have left me with no confidence in the propiety of lawyers in Ireland. (With apologies to those present)


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## mf1 (17 Jun 2008)

The property appears to have been left to all the brothers and sisters so even though it may have been OP's PPR it is not theirs solely. So more than likely there is a significant CGT liability.

Yes, it is the taxpayers liability but in some circumstances the solicitor carries a very significant   responsibility ( e.g. as agent for non resident tax liable owners) and they ( the solicitor )should make sure that any CGT liability is discharged or else they will carry the liability. 

While I appreciate that recent events have very much exposed how significantly a solicitor can "screw" the system,  the banks and their clients, it would be wise not to jump to any conclusions about the solicitor in the situation as presented. 

And if we could all remember, you hear one side of the story only on boards like this. It is better to try and tease out the likely/possible issues before jumping to (potentially) entirely incorrect conclusions. 

mf


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## ubiquitous (18 Jun 2008)

If you don't trust your solicitor or want a second opinion, get an accountant to advise you on the capital gains tax issues and liability if any.


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## MOB (18 Jun 2008)

As MF1 says, there may well be good grounds for the solicitor stating that he\she has some liability on the CGT.  However, there is no good reason to retain 100% of the sale proceeds while resolving this.  There are two possible taxes - CGT and CAT.   A provision can be made for the maximum exposure on each tax.  The balance can be released.   That is what I would do in the solicitors position.  The beneficiaries should ask their solicitor to do likewise.


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## j26 (18 Jun 2008)

How difficult is it to calculate CGT?

I thought  it's 20% of any gain of the value of the asset over time less the allowance and the cost of disposal (estate agent & legal fees), so it should be;

(Sale price - acquisition value) x 0.2

Also, I didn't know the solicitor was responsible for ensuring it was paid.  When I sold an investment property a couple of years back, the solicitor provided an estimate of the tax due, but it was up to me to make the return.


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## Camry (18 Jun 2008)

mf1 said:


> The property appears to have been left to all the brothers and sisters so even though it may have been OP's PPR it is not theirs solely. So more than likely there is a significant CGT liability.
> 
> Yes, it is the taxpayers liability but in some circumstances the solicitor carries a very significant responsibility ( e.g. as agent for non resident tax liable owners) and they ( the solicitor )should make sure that any CGT liability is discharged or else they will carry the liability.
> 
> ...


 
I am making no accusations at all. If someone is holding on to money that belongs to you and will not release it I would go get a second opinion. Simple as that.

The rest of what you write is supposition, rationalisation and guesswork. I still think this sounds strange. It won't hurt to ask the opinion of someone who isn't in possession of you money.

Here, from the Revenue FAQs on CGT:



> 13. How do I calculate my tax?
> *Capital Gains Tax is a self- assessment tax*. Regardless of whether you are registered for tax purposes you must calculate and pay your tax and file a return of gains and losses without being requested to do so by Revenue


 
Go get some advice.


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## ubiquitous (18 Jun 2008)

j26 said:


> How difficult is it to calculate CGT?
> 
> I thought  it's 20% of any gain of the value of the asset over time less the allowance and the cost of disposal (estate agent & legal fees), so it should be;
> 
> ...



In practical situations, CGT can be a lot more complicated than you make out. The determination of variables such as acquisition values, enhancement expenditure, the extent of applicable PPR exemption and other factors can get very awkward if you don't know what you are doing. And if you get it wrong, there can be very unpleasant consequences.


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## juke (18 Jun 2008)

j26 said:


> Also, I didn't know the solicitor was responsible for ensuring it was paid. When I sold an investment property a couple of years back, the solicitor provided an estimate of the tax due, but it was up to me to make the return.


 
Whilst it unclear from the op's post if this applies, in circumstances where a one or more of the vendors is non resident - the solicitor must ensure the CGT is paid


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## Bronte (18 Jun 2008)

OP what was the value of the house when your parents died and what year, also what was it sold for.  How many of you are there, did both parents die at the same time, are all of the beneficiaries living in Ireland.  If you give details like this then maybe someone on here could calculate the likely CGT tax.  It's highly unlikely a house split between many brothers and sisters, inherited from parents would have a CAT liabity.  Some, not all solicitors hang onto money to earn interest.  But as far as I know you are entitled to that interest.  If your not happy you should visit the solicitor and enquire what is going on, as previously stated he could be having problems in dealing with revenue.


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## Camry (18 Jun 2008)

juke said:


> Whilst it unclear from the op's post if this applies, in circumstances where a one or more of the vendors is non resident - the solicitor must ensure the CGT is paid


 
This situtation interests me. Are you a solicitor with experience in this area?

If so, can you point me to the legislation that provides solicitors with the right to withhold client funds? It might come in handy some day.


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## ubiquitous (18 Jun 2008)

Bronte said:


> OP what was the value of the house when your parents died and what year, also what was it sold for.  How many of you are there, did both parents die at the same time, are all of the beneficiaries living in Ireland.  If you give details like this then maybe someone on here could calculate the likely CGT tax.



Its difficult to believe that someone on this board could calculate the OP's tax liabilities without meeting them or at the very least after having a detailed conversation with them in relation to the circumstances of the case, and an examination of the various documents available in relation to acquisition, disposal and other relevant information.

To suggest otherwise is reckless imho and would be likely to get the OP into trouble were they to proceed on the basis of an incorrectly calculated CGT position.


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## Thrifty (18 Jun 2008)

I agree with Ubiquitous that the CGT calculation if far more complicated that you realise. I think also inheritance tax is being confused here. inheritance tax if any should have been deal with when the house was transferred into yourself and your siblings names. In relation to Capital gains tax the share of each will be calculated, then how long did each live in the house as their PPR. There are exemptions and periods of deemed residence that can alter this calulation which is basically calculated to the number of days. You may not have to pay tax as your share is probably covered under the PPR rule but your siblings period of PPR will have to be calculated over ten years. has the solicitor got all the information he needs in relation to this. Is he/she waiting any additional information from any of your siblings? Also indexation (a sort of calculation which tried to account in some way for inflation) will be applied to the value of the house when inherited.  There are alot of things to take into account - the solicitor may have to employ a tax consultant to assist.


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## Bronte (18 Jun 2008)

Sorry Ubi but I did say 'likely' CGT liability, I never suggested the OP should calculate his tax himself, but there is nothing wrong with him doing so if he wants.  I was just giving him an alternative suggestion - isn't that what AAM is for?  Some people, especially on here are able to calculate it quite easily, and if he gave more details then it might come to light why it is taking so long for the solicitor.  Of course one should get independant professional advice but one is entitled on AAM to get all suggestions/ideas but they ultimately have to use their heads and decide what is best for themselves.


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## ubiquitous (18 Jun 2008)

Fair enough, but the fact remains that the it would be next to impossible for anyone to calcluate a 'likely' CGT liability unless and until they have all the facts to hand, given the range of factors that may be relevant.


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## mf1 (18 Jun 2008)

"If so, can you point me to the legislation that provides solicitors with the right to withhold client funds? It might come in handy some day."

Section 1034 Taxes Consolidation Act 1997. 

mf


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## Camry (18 Jun 2008)

mf1 said:


> "If so, can you point me to the legislation that provides solicitors with the right to withhold client funds? It might come in handy some day."
> 
> Section 1034 Taxes Consolidation Act 1997.
> 
> mf


 


> *1034.**—*A person not resident in the State, whether a citizen of
> Ireland or not, shall be assessable and chargeable to income tax in
> the name of any trustee, guardian, or committee of such person, or
> of any factor, agent, receiver, branch or manager, whether such
> ...


 
That says that the Revenue can make a tax assessment against a non-resident person. That is not the issue here. The OP is not non-resident so this is not relevant.​ 
You see here is the paradox of the situation (and the issue that this section of the legislation tries to address). If the solicitor still holds the funds then the OP is not, legally speaking, in receipt of any capital gain and hence doesn't have any tax liability. So what is the solicitor doing assessing a tax liablity that technically doesn't exist because he/she has released the funds to the OP? The tax liability only accrues on receipt of the capital gain.​ 
And that is the point of s1034. This legislation allows the receipt to be imputed as soon as the transaction is completed *in the case of a non-resident *in order to prevent a tax avoidance opportunity, whereby the funds could go from the solicitor to an offshore destination, at which point it wouldn't be within an Irish tax jurisdication.​ 
So I still need to see where this solicitor obtains the legal right to withhold funds from a client in these circumstances.

Besides, even I (a non-lawyer) would happily take on this case, because the legislation clearly states that this section applies to *income tax*. Case dismissed.​


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## ubiquitous (18 Jun 2008)

Camry said:


> Besides, even I (a non-lawyer) would happily take on this case, because the legislation clearly states that this section applies to *income tax*. Case dismissed.



Not quite

http://www.irishstatutebook.ie/1997/en/act/pub/0039/sec1043.html



> Taxes Consolidation Act, 1997
> 
> 1043 1997 39	Application of sections 1034 and 1035 for purposes of capital gains tax.
> 
> 1043.—Without prejudice to the generality of section 931(2), of sections 1034 and 1035 shall apply, subject to any necessary modifications, to capital gains tax.


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## ubiquitous (18 Jun 2008)

Camry said:


> If the solicitor still holds the funds then the OP is not, legally speaking, in receipt of any capital gain and hence doesn't have any tax liability.



Totally incorrect. CGT applies on the disposal of an asset, regardless of whether the vendor is in receipt of funds, or for that matter, whether monies change hands at all. That is why gifts of land etc are taxable to CGT.


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## Camry (18 Jun 2008)

ubiquitous said:


> Totally incorrect. CGT applies on the disposal of an asset, regardless of whether the vendor is in receipt of funds, or for that matter, whether monies change hands at all. That is why gifts of land etc are taxable to CGT.


 

So if Michael Lynn handled the sale of my investment property and he took off with my money I would still have to pay a CGT bill regardless of whether I received any money at all?

Don't believe it.


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## ubiquitous (18 Jun 2008)

http://www.citizensinformation.ie/categories/money-and-tax/tax/capital-taxes/capital-gains-tax


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## Camry (18 Jun 2008)

This thread ios getting off track. This is what we know:

The asset was passed to children on death - CGT does not apply.
This asset was jointly owned by OP and siblings and used as PPR by OP and finally sold - CGT may be chargeable to siblings, not OP.
The issue is:

The solicitor has retained the proceeds of the sale in order to "assess capital gains tax",
but

CGT is a self assessment tax - the OP and siblings are individually responsible for declaring and paying any applicable tax.
Any CGT would not be payable by the OP until October 31 this year anyway.
The question I posed still remains:

By what legal authority does the solicitor refuse to release the funds? As I showed s1034 does not apply.


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## mf1 (18 Jun 2008)

"By what legal authority does the solicitor refuse to release the funds? As I showed s1034 does not apply. "

Did you read post 24 above? It may apply. If any of the OP's siblings are not tax resident, solicitor will be personally responsible for any CGT payable and, in reality, the only way to make sure that that does not happen is to discharge the entire liability. 

I note OP has gone remarkably quiet. 

mf


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## Camry (18 Jun 2008)

mf1 said:


> "By what legal authority does the solicitor refuse to release the funds? As I showed s1034 does not apply. "
> 
> Did you read post 24 above? It may apply. If any of the OP's siblings are not tax resident, solicitor will be personally responsible for any CGT payable and, in reality, the only way to make sure that that does not happen is to discharge the entire liability.
> 
> ...


 
But they may not be non-resident. That is what I would like to get to the bottom of.


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## ubiquitous (18 Jun 2008)

Camry said:


> But they may not be non-resident. That is what I would like to get to the bottom of.



I would have thought that it is pointless to speculate further until/unless the OP clarifies this. As mf1 says, they have gone quiet.


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## dodo (18 Jun 2008)

Just curious , how many siblings are involved, eg if it was 5 and  you are all entitled  to 381K tax inheritance then only if the house was valued at more than   1.9 Million,I am open to correction but I thought this was the procedure providing money has not been given before.I would also ask him for bank statements showing the interest you have made with your  money from the sale of the house.


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## mf1 (18 Jun 2008)

dodo said:


> Just curious , how many siblings are involved, eg if it was 5 and  you are all entitled  to 381K tax inheritance then only if the house was valued at more than   1.9 Million,I am open to correction but I thought this was the procedure providing money has not been given before.



OP is talking about CGT - the reference above is to CAT. 

mf


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## coolatjc (18 Jun 2008)

ubiquitous said:


> I would have thought that it is pointless to speculate further until/unless the OP clarifies this. As mf1 says, they have gone quiet.


 
Hi all, 

Just to confirm

I live in Ireland, but my brothers and sisters live in the UK.
There are 6 of us in total.
The house sold for €150,000. But after fees i think we will end up with €140,000 (legal fees and auctioneer) or so but this still hasnt been confirmed as the solicitor is still adding up the CGT!

Spoke to the solicitor today who said he is still trying to find out the totals, but he is blaiming revenue for taking so long. Surely revenue wouldnt take around 7 weeks?

Eitherway i checked the revenue website today and it seems to be a very simple calculation to decide how much tax should be paid on the profit of the house which would be divided by us all.  So I really cant see what the hold up is?

thanks for the help


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## mcaul (19 Jun 2008)

It can take up to 3 months! 

A range of issues will be covered including if the house has moved up in value since the will was executed (not likely in todays market) - if so standard CGT is applicable to in the increase in value since.

Also as some people are UK residents, this also has to eb taken into account as they will receive their subject to UK tax laws.

99% of solicitors are honest decent people, same as 99% guards, doctors etc etc. Its the one percent that we all worry about.


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## coolatjc (22 Jun 2008)

Hi all, and thanks again for your help and advice.

I have spoken to my solicitor and im still getting no where.

He has now informed me that he is still in the process of sorting out my CGT.

He has also informed me that he will be going on holiday in a weeks time for 2 weeks!

I guessing that basically means that I wont see my money for at least 3 weeks or more meaning that will bring the waiting time upto 10 weeks since my house was sold!

I asked the solicitor about the possability of taking €500 from each family member and keeping that to pay towards the CGT and giving us the rest of the monies divided between us.

He refused to do this saying that he didnt want to keep writing different cheques!

Surely I am instructing him?

My Brother is flying home from England to try and sort this out.  He cant beleive like me how long this is taking.

Can anyone give me advice on how to take things next.

Is it reasonable for me to ask the solicitor to take €500 from each which would mean taking a total of €3,000 for a property that sold for €135,000 before fees for CGT?

And if he refuses as he has, do I have any legal power to say sorry but thats what I want to do.

Also someone mentioned that the revenue can take 3 months, is there anyway I can pay the balance myself without the solicitor.  Surely it must be a very easy calculation and then just a case of sending the money?

And the attitude of the solictor is tough.  Considering im paying for this surely I should have some better basic rights to get my money and that ten weeks or more is simply unfair to have to wait to receive money from the sale of a house!


What I really want is something that I can go into the office of the solicitor next week and basically say stop taking the mick and under section something of Irish law you have to do this and pay me my money!
In a nice PC way!

Thanks for any help in advance!


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## MOB (22 Jun 2008)

"Is it reasonable for me to ask the solicitor to take €500 from each which would mean taking a total of €3,000 for a property that sold for €135,000 before fees for CGT?"

No - within this figure of €135k, there could be a capital gain of €35k (i.e. tax of €7,000) or there could be  a capital gain of €100k;  Without all the facts it is impossible to know, but it is most unlikely that the tax bill will be as small as €3k.

"And if he refuses as he has, do I have any legal power to say sorry but thats what I want to do. "   

It depends.  One possibility might be (I emphasise that it might not be possible - because we do not have all the facts)  for the solicitor to get the written authority of all your siblings to remit the money in its entirety to you,  You can then divide it out.  Of course, if there is an underpayment of tax, you will then be the one responsible to the Revenue- but presumably that is a risk you are happy to take.


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## Bronte (23 Jun 2008)

OP - suggest to the solicitor that he keeps 20 % ie 28,000 of the 140000 sale price less costs figure you mentioned.  He would be more than covered then if there was a tax liability.  I too thought that as it's a self assessment tax it was nothing to do with the solicitor, I don't know why but I thought they only had to hold on to it only in cases of a sale of more than 500000 but I'm not sure on this.


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## dazza21ie (23 Jun 2008)

Bronte said:


> OP - suggest to the solicitor that he keeps 20 % ie 28,000 of the 140000 sale price less costs figure you mentioned. He would be more than covered then if there was a tax liability. I too thought that as it's a self assessment tax it was nothing to do with the solicitor, I don't know why but I thought they only had to hold on to it only in cases of a sale of more than 500000 but I'm not sure on this.


 
OP has already said that some of the parties involved are non-resident, therefore, the solicitor is secondarily liable for CGT. If i am secondarily liable for CGT I will make sure that the tax is paid or will be paid before the proceeds are distributed. 

The €500,000 limit you are thinking of is the threshold for where a CGT Clearance Certificate is required on closing of a sale. If the vendor's solicitor doesn't provide this on closing the purchaser's solicitor forwards a percentage of the sales proceeds directly to the Revenue.

OP's solicitor should really have flagged this from the start and should have done a calculation after the sale closes so that the majority of the funds could have been released immediately.


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## Gordon086 (24 Jun 2008)

I sold a house last year and the solicitor left it up to me to sort out the CGT, which is as far as I'm aware the correct way to do it. Depending on the date you sold the house, I think you may have up to nearly a year before the CGT deadline, and would be better off with the money in the bank for those months and waiting to pay the CGT at the last minute before the deadline.


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## Vanilla (24 Jun 2008)

Gordon086 said:


> I sold a house last year and the solicitor left it up to me to sort out the CGT, which is as far as I'm aware the correct way to do it. Depending on the date you sold the house, I think you may have up to nearly a year before the CGT deadline, and would be better off with the money in the bank for those months and waiting to pay the CGT at the last minute before the deadline.


 

And are you non-resident? Which is the relevant point in case you missed that bit.


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## Gordon086 (24 Jun 2008)

Sorry, didn't get to read everything. I am not non resident.


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## Bronte (25 Jun 2008)

Vanilla I am non resident sold a property in Ireland in the last 10 years and I got all the proceeds and paid my own CGT (the hardest cheque I ever wrote).

I've just discovered from my thread that my solicitor should not have given the money to me, but we have a long relationship so it's a bit different to the OP's situation.  Still don't see why the solicitor can't hold back enough for the tax and pay out the rest in the meantime at a cost of 17 cent per cheque.


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## dazza21ie (25 Jun 2008)

Gordon086 said:


> Depending on the date you sold the house, I think you may have up to nearly a year before the CGT deadline, and would be better off with the money in the bank for those months and waiting to pay the CGT at the last minute before the deadline.


 
CGT due date is dependent on the contract for sale. If it is dated between January and Septebmer CGT is due by 31st of October that year. If it is dated between October and December CGT is due by 31st of January the following your. So a maximum of 10 months of the money sitting in the account earning interest before you be-grudgingly give it over to the Revenue.


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## dazza21ie (25 Jun 2008)

Bronte said:


> Vanilla I am non resident sold a property in Ireland in the last 10 years and I got all the proceeds and paid my own CGT (the hardest cheque I ever wrote).
> 
> I've just discovered from my thread that my solicitor should not have given the money to me, but we have a long relationship so it's a bit different to the OP's situation. Still don't see why the solicitor can't hold back enough for the tax and pay out the rest in the meantime at a cost of 17 cent per cheque.


 
Lucky solicitor that you were honest enough and paid your tax s/he could have been left to pick up the bill!


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## mallow (28 Jun 2008)

These discussions come up constantly on AAM and every single time a rash of posters descend to hang, draw and quarter the solicitor as soon as possible.  Complete lack of knowledge of the facts, tax law etc is no impediment.  Is there any chance that posters could calm down on the paranoia?  There is now a common assumption that all solicitors are Michael Lynn.  A little perspective would actually help the OP and others like him to get a proper answer without descending into conspiracy theories...


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