# Charge for CGT calculation



## Occasional (10 Sep 2004)

Hi folks,
Anyone out there know what is a reasonable charge for an accountant to do a CGT calculation?
My brother was left a few acres of land 2 years ago(valuation accepted by revenue was given to the accountant) , he gave me a free site. The site is registered in my name now and my brother wanted to calculate the CGT due on the gift of a site to me.
He was advised to go to an accountant who came up with a liability of around 100 euro less than I did and charged 600 euro plus tax for doing that (reduced it to 300 euro plus tax on account of knowing my brother)
I would have been better off overpaying revenue by 100 euro.
Also if you miscalculate CTG and overpay revenue do they refund the excess when they check the calculations?


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## Guest (10 Sep 2004)

Not sure what the going rate is but if the sums are significant and you are not sure how to calculate tax liabilities then it makes sense to seek independent, professional advice. Does this calculator come up with the correct result or is your situation too complicated for it to deal with?

www.askaboutmoney.com/clu...gtcalc.htm


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## Occasional (10 Sep 2004)

The situation wasn't complicated at all.
The accountant was given a valuation of the site and a valuation of the land left to my brother.
The site was roughly one sixth of the total land.
All he had to do was to divide the total cost of the land by 6. Take that from the value of the site then take any expenses eg site registration, fees and personal exemption and divide the resulting figure by 5 (20%).
A basic Primary Cert maths question.
To charge 600 euro for that!!!!
All my brother really wanted to know was, was he missing out on anything to reduce the tax figure and ended up paying more.


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## Guest (10 Sep 2004)

> To charge 600 euro for that!!!!

Did he get a quote/estimate up front or just go ahead without asking what the charges were likely to be?

> All my brother really wanted to know was, was he missing out on anything to reduce the tax figure and ended up paying more.

In general with CGT some or all of the following can be used to reduce one's CGT liability:

- Annual personal CGT allowance of €1,270 (in not already used up)

- Indexation of acquisition price for inflation (up to December 31st 2002 only since Budget 2003)

[broken link removed]

- Any previously incurred capital losses (acquisition prices cannot be indexed for inflation to enhance a capital loss though)

- Any allowable acquisition/disposal/enhancement costs (e.g. broker/estate agent fees, stamp duty on acquisition, renovation costs etc.)

- Transfer of assets to spouse if applicable and justified:




Other Revenue CGT links:

[broken link removed]
[broken link removed]


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## Occasional (10 Sep 2004)

No I am afraid he didn't ask what the fee was likely to be expecting to pay maybe 50 to 100 euro for professional advice and maybe a saving on tax instead he was professionally robbed.
I fail to see how a fee like that can be justified.


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## Tommy (10 Sep 2004)

On the presumption that the fee includes the preparation of computations and a CGT return, €600 is not an unreasonable fee for such work. The issue is not the additional tax saving but the certainty that he now has from knowing that the liability as calculated is correct, and that there is no obvious inherent credibility problem with valuations and information assembled for submission to Revenue (as often happens in these scenarios) With all respect, if primary cert maths is all that is at issue, why didn't you do it yourself?

Although I am an accountant myself, I find it mind-boggling that people can expect to pay as little as €50 to €100 for advice (even apart from the additional cost preparation & processing of returns) when the advisor could be held professionally accountable in the event of an error.


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## MOB (10 Sep 2004)

*CGT*

"All he had to do was to divide the total cost of the land by 6. Take that from the value of the site then take any expenses eg site registration, fees and personal exemption and divide the resulting figure by 5 (20%).
"

I don't think this is correct. The computation rules for a part disposal are not correctly implemented in the above process.


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## Occasional (10 Sep 2004)

"and that there is no obvious inherent credibility problem with valuations and information assembled for submission to Revenue "
Tommy
The valuations had already been submitted by a solicitor to revenue and had been accepted and stamp duty paid so all the accountant had to do was calculate the CGT due.
Not a lot of work for a lot of money.


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## Guest (10 Sep 2004)

> I fail to see how a fee like that can be justified.

How did the solicitor justify the charges when asked?


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## Occasional (10 Sep 2004)

It wasn't the solicitor that charged that it was an accountant and my brother was so shocked I am afraid, he being a quiet fellow, was just stunned and speechless and regrets being thrusting and naive in not asking what the fee was likely to be.Its an expensive lesson.


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## Tommy (11 Sep 2004)

> Not a lot of work for a lot of money.



The point is that you're not paying for work - you're paying for expertise. Expertise is not gathered from the trees, it requires research, study, training and other inputs separate from the work being charged for. None of these inputs come cheap, nor do other overheads specific to professional services - for example professional indemnity insurance. These costs must be built in to the fee levels charged by the  professional - otherwise their work is uneconomic and ultimately unsustainable. This applies whether you are talking about accountants, solicitors, brain surgeons or software engineers.

At the end of the day, given the tone of your earlier posts, I realise I'm probably wasting my time trying to explain this to you but what I am saying is the reality. 

ps If you're stunned and speechless about having to pay a discounted fee of €300 for CGT advice, then you are in for some shock when you start building your house :lol


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## Brendan Burgess (12 Sep 2004)

*...*

Tommy,

"On the presumption that the fee includes the preparation of computations and a CGT return, €600 is not an unreasonable fee for such work.".... "This applies whether you are talking about accountants, solicitors, brain surgeons or software engineers."

I think there is a high degree of arrogance in your statements here. The expertise that you refer to, does this mean that the guy could have charged six grand for this and put it down to having studied in a different college which was more expensive? I think this whole expertise issue is bullshit for what was a very simple piece of worked which almost certainly could have been achieved for free on AAM (I'm sure you don't like the sound of that!)

The obvious problem is that the guy didn't ask for the price up front - seems to be a common problem people have with accountants and solicitors. 

One simple question, how long would it take for such a professional with all the expertise and background you mention to do this work? Half and hour? An hour?


_Unnecessary, offensive comment deleted - in future, the whole post will be deleted if offensive comments are included_


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## oilean (13 Sep 2004)

*Re: ...*

Occasional,

if it was so easy why go to an acountant?


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## Occasional (13 Sep 2004)

Sorry folks no net access over the weekend and thanks for all the replies.
Oilean my brother was advised by his solicitor to get an accountant to do it to help reduce the liability.
My brother rang me and asked me how much I thought the liability would be and I calculated in my head a figure that was just 100 euro more than the accountant.
Look at it this way Tommy my brother's take home pay is just over 300 euro/wk so its not difficult to see how you would be upset when someone charges you 2 weeks pay for a calculation on top of 5 weeks pay by a solicitor to register the land and then then revenue want most of the rest of the years wages in CGT just because my brother was kind enough to give me a site.
You can also stop laughing Tommy as I have my house built by professional tradesmen who didn't charge an arm and a leg, who also pay insurance and have a liability for anything going wrong and they didn't find their expertise on trees either. Bear in mind we are all experts in our own areas and its a good job we all don't charge what some professional bodies charge.


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## Tommy (13 Sep 2004)

Hang on a second



> The expertise that you refer to, does this mean that the guy could have charged six grand for this and put it down to having studied in a different college which was more expensive?



You seem to forget that price competition does exist between advisors for this sort of work...



> I think this whole expertise issue is bullshit for what was a very simple piece of worked which almost certainly could have been achieved for free on AAM (I'm sure you don't like the sound of that!)



...but that doesn't necessarily mean that you can get quality advice for nothing, even if supplementary opinions can be obtained on AAM - of course I don't have a problem with that. Why should I when I have promoted and assisted AAM (for free BTW) practically since its inception. BTW, I'm sure you are aware thatAskaboutmoney is not a substitute for professional advice 



> The obvious problem is that the guy didn't ask for the price up front - seems to be a common problem people have with accountants and solicitors.


 What makes you think the price would have been different had he done so.

BTW Please be civil

Occasional



> You can also stop laughing Tommy as I have my house built by professional tradesmen who didn't charge an arm and a leg,



That's a good one - probably the first person ever to say so on AAM :lol 


> my brother's take home pay is just over 300 euro/wk so its not difficult to see how you would be upset when someone charges you 2 weeks pay for a calculation on top of 5 weeks pay by a solicitor to register the land and then then revenue
> want most of the rest of the years wages in CGT just because my brother was kind enough to give me a site


So the accountant is to blame for both the solicitors fee and the tax bill? Come on... 

Of course you and your brother could have just as easily gone to the Revenue for free advice and calculation of the liability. Why didnt you do so?


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## Occasional (13 Sep 2004)

"So the accountant is to blame for both the solicitors fee and the tax bill? Come on"

Now Tommy I never said that.
"Of course you and your brother could have just as easily gone to the Revenue for free advice and calculation of the liability. Why didnt you do so?"

Since it was our first time being involved in CTG we didn't know you could do that. We were just following the advice of another professional --the solicitor.

With my house built and all my money gone TG I won't need the services of an accountant again as there is nothing to count.


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## zag (13 Sep 2004)

Occasional - don't forget that while large jobs can be good value (from either a builder or an accountant) because they know how much they need to cover their costs, smaller jobs will almost certainly be relatively expensive.

If you were to ask a builder (unless he happens to be a mate) to replace 10 tiles, or to put up a single shelf you would find the charge would be quite high.  Change that to putting up 10 shelves or 100 tiles and the price would not have gone up 10 times.  There are certain minimum costs which anyone in business will seek to cover per transaction, expecially on once off transactions.

Also, bear in mind that the accountant (and the same for most people) will not price his work based on the savings to the client.  They will base it on the cost to carry out the work (plus profit, which is legitimate).

I understand that your brother feels hard done by, but he got a service which he asked for and at a reasonable price.  He had to bargain the price down when given the first cost, but in reality he would have been better off asking how much it was likely to cost *first*.

z


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## Other Builder (13 Sep 2004)

Appreciate what you are saying Zag it's just that it was a bit of a culture shock but it was a lesson learned never to be forgotten which is worth something.
Thanks all even Tommy. Sorry for wasting so much of your valuable time.


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## Hang on a second (13 Sep 2004)

*...*

Tommy,

I note that you didn't respond to the specific question I raised regarding how much work would have been involved ie. half an hour etc.

I didn't think that this was such a sensitive forum that use of the word bullshit was disallowed.

I do however have a major problem when accountants start assuming that they have the same status as brain surgeons - don't delude yourself!

And BTW do you know of any accountants that have price lists on their walls?


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## Tommy (13 Sep 2004)

*Re: ...*



> I note that you didn't respond to the specific question I raised regarding how much work would have been involved ie. half an hour etc.



That's because I wouldn't be able to answer it properly because the amount of work will vary according to the circumstances of the case and the needs/wants of the client, ie if there is one meeting with the client on the issue, this will be take a certain time & be built into the cost, if there are two or more the extra will also have to be built in. If the client wants returns or computations to be filed this will also take longer and cost extra. If there are particular difficulties or complexities this will also consume more time & increase the cost. If the advisor is already familiar with the client and doesn't need to chase up the same detail of info that would be needed from a non-client, this would normally reduce the time & cost.



> I didn't think that this was such a sensitive forum that use of the word bullshit was disallowed.


Agreed, but the use of labels such as arrogant, bullshit etc might be judged to have crossed the line of attacking the person giving the viewpoint rather than attacking the viewpoint



> I do however have a major problem when accountants start assuming that they have the same status as brain surgeons



Where did I say that? However it does happen that many professional consultancy practices (of whatever hue) will adopt similar billing practices and models. That doesn't mean they cost the same or that they do the same type of work. For example, a self-employed gardener or handyman may charge out his time on the same basis & principles as an aeronautical engineer, that doesn't mean the two are somehow equal. Or does it? 



> And BTW do you know of any accountants that have price lists on their walls?


 No - why should they if the type of work they do does not lend itself to scale fees? Remember that no two companies or individuals have exactly the same requirements, especially where advisory services are concerned. Would you prefer if Occasional, with his limited resources and relatively straightforward CGT query, had to pay the same advisory fee as a large scale developer with a much more complex query or a landowner who needs CGT advice before deciding to sell a field for €10m? BTW, in industries where professional scale fees do apply and are publicly advertised (solicitors and hairdressers, to name two) there does not appear to be much benefit to the consumer in the form of lower costs.


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## Hang on a second (13 Sep 2004)

*................*

Quote "This applies whether you are talking about accountants, solicitors, brain surgeons or software engineers" does this ring a bell?

Quote "without knowing the circumstances of the case and the needs/wants of the client, ie if there is one meeting with the client on the issue, ....If the client wants returns or computations to be filed this will also cost extra ....  If there are particular difficulties or complexities this will also cost more." The question was "what is a reasonable charge for an accountant to do a CGT calculation?"

Quote "Remember that no two companies or individuals have exactly the same requirements, especially where advisory services are concerned." Just like no two haircuts are the same?

Quote "BTW, in industries where professional scale fees do apply and are publicly advertised (solicitors and hairdressers, to name two) there does not appear to be much benefit to the consumer in the form of lower costs. " This is questionable to say the least, I wouldn't agree with either of these examples.


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## rainyday (13 Sep 2004)

*...*

"and...?? " this was in response to your question "where did I say that" - remember?

"I thought I have already answered this by pointing out how the amt of a "reasonable charge" may vary between situations." - wooly to say the least Tommy, why don't you provide a straightforward answer as to how long it takes to compute the calculation as per Occassionals posts - then we can work out the hourly rate ourselves?

_Professional jibe deleted_


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## Tommy (13 Sep 2004)

*Re: ...*

HOAS

Please dont ask me to answer questions that I cannot answer. How on earth can I know the particulars of Occasional's case?


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## Tommy (14 Sep 2004)

*Re: ................*



> Quote "This applies whether you are talking about accountants, solicitors, brain surgeons or software engineers" does this ring a bell?



and...?? 



> The question was "what is a reasonable charge for an accountant to do a CGT calculation?"


 I thought I have already answered this by pointing out how the amt of a "reasonable charge" may vary between situations.



> Quote "BTW, in industries where professional scale fees do apply and are publicly advertised (solicitors and hairdressers, to name two) there does not appear to be much benefit to the consumer in the form of lower costs. " This is questionable to say the least, I wouldn't agree with either of these examples



Okay, can you then explain how and why the old scale systems of fixed-percentage legal fees have benefitted consumers? Remember conveyancing fees have reduced in recent years because certain discount solicitors have ignored these scale fees and offered their own pricing packages to "cherrypicked" clients.  These services are being priced at probably the same level that applied several years ago before property prices went through the roof. However anyone who is paying a fixed-percentage scale fee is probably paying too much. The point is that just because a standard price is stated at the outset (set at the same level or rate to cover both complex and straightforward work) doesn't mean that the consumer is getting value for money.


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## oilean (14 Sep 2004)

*Re: ...*

This is not the first time I have seen Tommy barraged into giving a fee for a particular job that someone else has charged

He has not charged this fee, he has merely stated that it is in the ballpark of what could be expected

How anyone could go to a professional anything and expect to be charged €50-100 is stupid, especially if forms had to be completed

HOAS, you suggest what hourly rate a qualified accountant should charge for what you believe is fair and then I will show how long it could take to do a CGT calculation, and I will not fudge the answer

Stu


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## oilean (14 Sep 2004)

*Time?*

But there is an initial meeting, 1/2 to 1 hour

To do the comp and make sure that there has been no change by the government, since they seem to want to change their mind every budget on development land (which the land may be) should possibly be around 1/2 to 1 hour
*There may have been a Form 11/12 completed as part of the CGT comp, more info requried
**It may be junior cert maths but get it wrong and you will know about it (Hands up those who got 100% in the Junior Cert)

As with all new clients there is a need to obtain proof of identification, proof of address, copy these and complete a record/form (Anti monet laundering procedure), admin time

For most billing systems there is a need to perform some form of admin function also, admin time

Final meeting, up to one hour, 1/2 to 1 hour

When Revenue assessment comes back to check it to the original return and comp, 1/2 hour

Final contact with client, whether phone call or meeting

You may say that the admin time should be the burden of the accountant and it will for existing or new continous clients
But once off work will have to be billed it fully, they received the time

Therefore that is a minimum of 2 hours partner time or a maximum of 3, plus admin time
At €100 per hour, that is €200-€300 plus $50-$100 before Vat

To be honest I have not seen a practice were you will get partner time at that rate

But as you can see from the above 

quickly calculating a CGT liability 

and doing it as a profession are very different

Stu


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## Hang on a second (14 Sep 2004)

*........*

Rainyday - apologies for the professional jibe, perhaps Tommy might consider a similar gesture for taking the mick at Occassionals alleged niavity.

Oilean, the question was about calculating the CGT liability. It was Tommy who introduced all the other stuff about forms and returns.

To me it seems that Unregistered User seemed to make a good fist of the calculation and that did not appear to be rocket science (or brain surgery as the case may be!). 

So to your question, I would say €100 an hour would be quite fair, that's a run rate of 200k per year. So how long would it take to do the math?

HOAS


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## temptedd (14 Sep 2004)

*Re: ........*

I'm not sure what you mean by a "run rate" but the 200k figure per year seems a little misleading to me. If you mean what the accountant earns per year I think it's way off.

If they bill €100 per hour for 39 hours a week for 48 weeks a year that's €187,200 gross. (and I don't think it's true that they manage to bill every hour of every week!) Then they pay a secretary, say €30,000 all in for salary, PRSI, etc. Then they rent and run an office, phones, heat, light, etc etc and pay professional liability insurance. Even running this sort of business on a shoe string, it's not looking like they are making a massive fortune at the end of the year (especially after the tax man takes his share!).

I don't think I'd want to be getting advice from an accountant selling himself for €100 per hour, because if they can't look after their own business, I'm not sure I'd want them looking after mine!


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