# How to pay capital gains tax



## adox (9 Aug 2018)

I’m the sole executor of my late mother’s will. Her house has been sold and the funds added to her estate. There’s a €30,000 difference in the sale price from the valuation price so capital gains tax is due by me to the revenue. The thing is, I’m quite confused about the correct procedure for paying this, or more importantly what forms to complete etc. 
I know exactly how much is due so that end of things isn’t a problem. The benefactors of the will are all going to be paid in the coming days and I will pay the tax myself as the executor and claim it back from the other benefactors( my sisters so no worries on that front)

I did ring the revenue a few weeks ago about it but got a very vague answer, they didn’t seem sure of the correct procedure. I also asked for some advice from my financial advisor but he wasn’t 100% clear either. 
I had hoped that it would all be looked after by the solicitor and that what was left would be then distributed to the benefactors but they have said that they don’t do it and it’s my responsibility. 

I am thinking perhaps my best course of action is maybe to call into a revenue office in person and seek advice and help on it? 

The amount of money due is quite small in the grand scheme of things and the money isn’t a worry at all(even less so when I will be getting the inheritance in the coming days). It’s the red tape that has me concerned and the correct way of doing it. I’ve never really dealt with the revenue before as a PAYE worker I’ve never had to make any returns before. I’m quite twitchy about having this responsibility and want to get it sorted as soon as I can and in th correct  manner. 

I have looked on the revenue site but can’t find any clear direction on it thus my thinking that maybe calling into one of their offices may be my best course of action?

Any advice would be most gratefully welcomed.


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## Brendan Burgess (9 Aug 2018)

Hi adox

Welcome to the club. 

https://www.askaboutmoney.com/threads/how-does-executor-file-cgt-return-for-the-estate.204856/

Brendan


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## adox (9 Aug 2018)

Brendan Burgess said:


> Hi adox
> 
> Welcome to the club.
> 
> ...



Wow! Sounds like utter confusion all around.  Did you get yours sorted?
I think I may call to a revenue office for advice. My solicitor contacted revenue to get approval to distribute the proceeds of the estate with CGT to be paid afterwards by myself.  This was basically because they took so long process the will(the solicitors) and we wanted the whole thing concluded before they fumbled anymore. Probate on the estate was actually concluded on the estate in September 2017 but I only found this out in the last couple of months after contacting the probate office myself to see what was going on. Long story but utter incompetence by the solicitor. 

I do find it bizarre that it can be so complicated for people to hand over money to the revenue for taxes owed. I mean I have wanted to pay the amount owed for the last couple of months but I couldn’t find anyone to tell me definitively how to pay it. 

I think I have until the end of the year so I have time but I want to get it sorted as quickly as possible, which may be wishful thinking on my part judging by the thread you linked.


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## Vanilla (9 Aug 2018)

At the risk of repeating myself, pay for specialist advice. It doesn't need to cost much, but you will get the correct advice.

Revenue are not an advisory service and although I find them very helpful, they are not there to guide you. CGT and CAT and SD are all self-assessment taxes.

Your solicitor has said they don't deal with CGT ( some solicitors will not, most TEPs will) so go to an accountant. And please do this before you pay out the beneficiaries because you are responsible as executor for the full amount,not just your share. So best to pay the CGT and any fees and then divide the balance.


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## adox (9 Aug 2018)

Vanilla said:


> At the risk of repeating myself, pay for specialist advice. It doesn't need to cost much, but you will get the correct advice.
> 
> Revenue are not an advisory service and although I find them very helpful, they are not there to guide you. CGT and CAT and SD are all self-assessment taxes.
> 
> Your solicitor has said they don't deal with CGT ( some solicitors will not, most TEPs will) so go to an accountant. And please do this before you pay out the beneficiaries because you are responsible as executor for the full amount,not just your share. So best to pay the CGT and any fees and then divide the balance.



Thanks. The beneficiaries are already being paid. All fees have been taken from the pot before the funds are distributed except the CGT. I realize I am solely responsible for paying this as executor but there are only two other beneficiaries who are both my sisters who I have no problem in trusting to pay me back their share.

I would have thought that it would be quite expensive to employ the services of an account for this?

Also I realize that revenue are not an advisory service but the money is owed to them and needs to be paid to them with the correct paperwork from them so I don’t think it’s u reasonable to ask them how to proceed with correctly seeing as they don’t seem to have any clear indication of how to do so.


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## torblednam (9 Aug 2018)

adox said:


> Thanks. The beneficiaries are already being paid. All fees have been taken from the pot before the funds are distributed except the CGT. I realize I am solely responsible for paying this as executor but there are only two other beneficiaries who are both my sisters who I have no problem in trusting to pay me back their share.
> 
> I would have thought that it would be quite expensive to employ the services of an account for this?
> 
> Also I realize that revenue are not an advisory service but the money is owed to them and needs to be paid to them with the correct paperwork from them so I don’t think it’s u reasonable to ask them how to proceed with correctly seeing as they don’t seem to have any clear indication of how to do so.



The CGT is a liability of the estate, payable before the estate is distributed. It's just plain wrong to distribute the estate to the beneficiaries without having paid that tax liability first. If nothing else, you've overstated the value of everyone's inheritance, which could affect their future tax positions.


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## adox (9 Aug 2018)

torblednam said:


> The CGT is a liability of the estate, payable before the estate is distributed. It's just plain wrong to distribute the estate to the beneficiaries without having paid that tax liability first. If nothing else, you've overstated the value of everyone's inheritance, which could affect their future tax positions.



My solicitor has said that he contacted the revenue in writing to request clearance to distribute the estate with the CGT to be paid afterwards and that they granted that clearance.


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## PaddyBloggit (9 Aug 2018)

adox said:


> and that they granted that clearance.



in writing?


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## adox (9 Aug 2018)

PaddyBloggit said:


> in writing?



Yes apparently so, although I haven’t seen it in person(I have it in writing from my solicitor) The reason my solicitor gave was that one of the beneficiaries lives outside the country(not sure how that is relevant).

Anyway I’ve checked back on my correspondence with him and had asked him to retain the amount due in CGT before distributing the funds and gave him the amount down to the cent.
I have contacted him again to make sure this is done as the email I recieved  from him today did not contain it in his breakdown of the figures.

Apologies for going totally off on a tangent on this. I just want to make sure that everything is done correctly and I’m flying in the dark a bit here as a complete novice to tax returns and wills etc.

I think I will take the advise of the previous poster though and seek out and accountant for professional advice.


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## jpd (9 Aug 2018)

I did personal probate on my mother's estate and filed th CGT for a similar situation. I contacted the Revenue who gave me a PPS number for the estate and I filed a CGT return using this via the Revenue Online Site (ROS)  it was all very straight forward.


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## Vanilla (10 Aug 2018)

That clearance you mention that the solicitor received is for CAT, not CGT. Always necessary for a non-resident beneficiary.

You asked the solicitor to retain the CGT, but you know that he hasnt because you have seen the figures which I assume you approved before distribution. So just get on with it and retain the accountant as soon as possible. An accountant will be very reasonable and you will know it is done correctly. I assume you received IT clearance and that it is not necessary to file IT returns also.


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## adox (10 Aug 2018)

Vanilla said:


> That clearance you mention that the solicitor received is for CAT, not CGT. Always necessary for a non-resident beneficiary.
> 
> You asked the solicitor to retain the CGT, but you know that he hasnt because you have seen the figures which I assume you approved before distribution. So just get on with it and retain the accountant as soon as possible. An accountant will be very reasonable and you will know it is done correctly. I assume you received IT clearance and that it is not necessary to file IT returns also.



There is no CAT or inheritance tax due. It is only CGT due from the sale of the house. 

I have emailed the solicitor to asks for copies of the correspondence with the revenue and also asked him not to issue any funds until I am clear in what is going on. 

Re-reading his email from yesterday he has said that I need to make the CGT return myself personally and I am liable personally. Is that possible?


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## Bronte (10 Aug 2018)

Vanilla said:


> That clearance you mention that the solicitor received is for CAT, not CGT. Always necessary for a non-resident beneficiary.



That's interesting. As a non resident executor and beneficiary I never know about that.  I was only allowed be executor as a non resident by the probate office as the estate was so small.


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## T McGibney (10 Aug 2018)

adox said:


> I would have thought that it would be quite expensive to employ the services of an accountant for this?



Probably far more expensive not to.  

A decent accountant should be well able to justify their fees in terms of either tax savings and avoidance of common pitfalls in resolving the inherent uncertainties and red tape that is quite correctly concerning you.

Good luck with it.


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## PMU (10 Aug 2018)

adox said:


> Yes apparently so, although I haven’t seen it in person(I have it in writing from my solicitor) The reason my solicitor gave was that one of the beneficiaries lives outside the country(not sure how that is relevant).


This is most strange as it's my understanding that you cannot distribute an estate until you have 'filed and paid' the CAT for a non-resident beneficiary. For example, the Law Society's guideline on the Administration of Estates https://www.lawsociety.ie/globalassets/documents/committees/probate/adminestatebrochure.pdf states: “In the event that there are beneficiaries who are not resident in Ireland, Irish resident personal representatives are responsible for the payment and filing requirements of the non resident beneficiaries and should retain enough funds from the benefit of the non resident beneficiary to pay the inheritance tax due.”  This is a complex issue and Revenue has an eBrief No. 012/18 on dealing with non-resident beneficiaries https://www.revenue.ie/en/tax-professionals/ebrief/2018/no-0122018.aspx to which you should refer.


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## Vanilla (10 Aug 2018)

Even where there is no CAT due, you still need revenue clearance for a non- resident beneficiary. This is because strictly speaking that beneficiary might owe other taxes in Ireland, such as IT or VAT.

As the executor you have a secondary liability for taxes in the estate.


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## adox (10 Aug 2018)

PMU said:


> This is most strange as it's my understanding that you cannot distribute an estate until you have 'filed and paid' the CAT for a non-resident beneficiary. For example, the Law Society's guideline on the Administration of Estates https://www.lawsociety.ie/globalassets/documents/committees/probate/adminestatebrochure.pdf states: “In the event that there are beneficiaries who are not resident in Ireland, Irish resident personal representatives are responsible for the payment and filing requirements of the non resident beneficiaries and should retain enough funds from the benefit of the non resident beneficiary to pay the inheritance tax due.”  This is a complex issue and Revenue has an eBrief No. 012/18 on dealing with non-resident beneficiaries https://www.revenue.ie/en/tax-professionals/ebrief/2018/no-0122018.aspx to which you should refer.



There is no inheritance tax due as we fall below well below the threshold. There is capital gains tax to be paid from the sale of the house that is part of the estate.


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## adox (10 Aug 2018)

Vanilla said:


> Even where there is no CAT due, you still need revenue clearance for a non- resident beneficiary. This is because strictly speaking that beneficiary might owe other taxes in Ireland, such as IT or VAT.
> 
> As the executor you have a secondary liability for taxes in the estate.



Sorry Vanilla, what do you mean by secondary liabilities for taxes?


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## T McGibney (10 Aug 2018)

adox said:


> Sorry Vanilla, what do you mean by secondary liabilities for taxes?



If they don't pay, you become legally obliged to pay it for them.


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## adox (10 Aug 2018)

T McGibney said:


> If they don't pay, you become legally obliged to pay it for them.



As in any taxes that may be due to from them in relation to the benefits they are receiving from their share of the estate?


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## Vanessa (10 Aug 2018)

Just employ an accountant. The cost will come from the estate and at least you know everything is in order. You are executor and are liable for any taxes due from the estate if not paid by beneficiaries.


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## adox (14 Aug 2018)

Thanks all. I have spoken to an accountant today and passed on all relevant correspondence. Will be meeting him in person next week to go through it. 

No funds have been paid as yet to the benefactors but solicitor seems to have no problem releasing the funds to the benefactors less an amount held back to cover CGT. Correspondence with them has been extremely vague and frustrating when looking for definitive answers to questions regarding the mechanisms for paying CGT and if it needs to be paid before the benefactors receive their payment etc. 

Anyway in the hands of the accountants now so hopefully they can do the heavy lifting from here on in.


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## torblednam (14 Aug 2018)

adox said:


> No funds have been paid as yet to the benefactors but solicitor seems to have no problem releasing the funds to the benefactors less an amount held back to cover CGT. Correspondence with them has been extremely vague and frustrating when looking for definitive answers to questions regarding the mechanisms for paying CGT and if it needs to be paid before the benefactors receive their payment etc.



I suggest you read this link, it's as clear a summary as you're likely to find. If  assets are disposed of as part of administering the estate, the CGT liability is with the estate (i.e. the executors in their representative capacity).

http://www.ohanlontax.ie/downloads/TaxationofEstates.pdf


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