# Should I use an accountant when calculating CGT for sale of site?



## daveg (11 Oct 2006)

We are just in the process of calculating our CGT for sale of a site which we recieved the cheque for last week. It all seems fairly straight forward but would you recommend using an accountant? Also should we issue receipts for our allowances (solicitor fees, planning, advertising etc etc) with our CGT application?

Thanks in advance.


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## ClubMan (11 Oct 2006)

If the sums involved are significant to you then get expert advice. If not then consider doing it yourself.


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## daveg (11 Oct 2006)

We are looking at a CGT bill of a profit of about E50K minus allowances and costs incured such as legal fees. We sold the site ourselves so no estate agent fees and my brother in law did our plans for a small cash gift so thats not going to be a taxable allowance. I'm wondering if the accountant fees would be worthwhile?


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## ClubMan (11 Oct 2006)

If it was me then I'd certainly consider professional advice for such a figure but it might be peanuts to others.


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## ARCH (11 Oct 2006)

The fee will also be tax deductible as part of the cost of selling. Therefore the real cost is 80% of what is charged.


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## ClubMan (11 Oct 2006)

Are you sure about that? Say in the case above the assessable profit (after allowances etc.) is €50K so the _CGT _bill would be 20% of this or €10K. Now say that instead they pay a tax advisor €1K for advice. Now the assessable profit is €49K so _CGT _is €9.8K. The net cost of getting advice was €200 or 20% - not 80% - of the €1K.


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## bazermc (11 Oct 2006)

ClubMan said:


> Are you sure about that? Say in the case above the assessable profit (after allowances etc.) is €50K so the _CGT _bill would be 20% of this or €10K. Now say that instead they pay a tax advisor €1K for advice. Now the assessable profit is €49K so _CGT _is €9.8K. The net cost of getting advice was €200 or 20% - not 80% - of the €1K.



Yeah as ARCH said 80% of the real cost.  Being E1000 less tax savings made of E200 equals E800.

OP there is a relief available from CGT where the sale of site was to a child for the purpose of building a house.  Could that apply?


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## Ham Slicer (11 Oct 2006)

Get Professional advice.

If you don't, you'll make the same mistakes all DIY tax experts make.


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## ClubMan (11 Oct 2006)

bazermc said:


> Yeah as ARCH said 80% of the real cost.  Being E1000 less tax savings made of E200 equals E800.
> 
> OP there is a relief available from CGT where the sale of site was to a child for the purpose of building a house.  Could that apply?


Doh! My mistake. At least my excuse is that I'm not a professional!


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## 911 (11 Oct 2006)

Ham Slicer said:


> Get Professional advice.
> 
> If you don't, you'll make the same mistakes all DIY tax experts make.


 

I agree !


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## pernickety (11 Oct 2006)

I read many discussions here and elsewhere about how to calc CGT on sale of my property and was going to file myself, but as I live outside Ireland my solicitor advised that he is obliged to hold back the money and get accountant to file return for me. I agreed, thinking that the accountant may find gross errors etc. Actually my figures were spot on thank to AAM, but I ended up paying for the accountant. Lesson learned. Next time Ill do it myself!


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## extopia (11 Oct 2006)

911 said:


> I agree !



Me too, but don't be shy about asking questions and checking the tax professional's sums. Mistakes can always be made, and it's your money.


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## daveg (13 Oct 2006)

Thanks for the feedback. Were getting an accountant to look over the figures. Bazermc the sale was not to a child.

Could I ask one last question. When we submit the completed form and send in our cheque do we have to submit receipts for expenses claimed (solicitor fee's, advertising fee's etc)? Thanks in advance.


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## bazermc (13 Oct 2006)

daveg said:


> When we submit the completed form and send in our cheque do we have to submit receipts for expenses claimed (solicitor fee's, advertising fee's etc)? Thanks in advance.



No just the tax return and cheque, however, you must retain receipts etc for 6 years after sale in case of a query from Revenue.


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## ubiquitous (13 Oct 2006)

pernickety said:


> Actually my figures were spot on thank to AAM, but I ended up paying for the accountant. Lesson learned. Next time Ill do it myself!



The danger in doing this is that if there is a possibility of using tax planning to reduce your liability next time around, you may not be aware of this unless you have either an indepth knowledge of CGT or a good advisor. The availability of a tax planning opportunity in any individual case can mean large savings for those paying the CGT bill. There is a lot more to CGT than doing a tax computation. The skill is in identifying whether a tax planning strategy is possible.


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## daveg (13 Oct 2006)

Thanks for the info bazermac.

ubiquitous do you mean if you had previously/or will in the future pay CGT your liability may be different? I'm not quite sure what your saying in your post.


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## ubiquitous (13 Oct 2006)

daveg said:


> .ubiquitous do you mean if you had previously/or will in the future pay CGT your liability may be different? I'm not quite sure what your saying in your post.



What I am saying is there are a range of tax planning exercises which a professional (or anyone else conversant with CGT rules, precedents etc) can use to help a taxpayer to legitimately minimise their liability. Unless the taxpayer has a strong awareness of all the issues, they run the risk of paying more CGT than otherwise necessary, unless they use a competent professional for this purpose.


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## daveg (13 Oct 2006)

bazermc said:


> No just the tax return and cheque, however, you must retain receipts etc for 6 years after sale in case of a query from Revenue.





ubiquitous said:


> What I am saying is there are a range of tax planning exercises which a professional (or anyone else conversant with CGT rules, precedents etc) can use to help a taxpayer to legitimately minimise their liability. Unless the taxpayer has a strong awareness of all the issues, they run the risk of paying more CGT than otherwise necessary, unless they use a competent professional for this purpose.



Any chance you would list some of these examples of legitimate expenses?


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## ubiquitous (13 Oct 2006)

I am not talking about deductible expenses. Read any technical textbook on CGT and you may get a flavour of what I am talking about. Sadly I don't have time to write a book on it.


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## ClubMan (13 Oct 2006)

Stuff like offsetting previously incurred capital losses against subsequent gains perhaps? Note that the rules for doing this are strict and not necessarily obvious (e.g. you must write off previously incurred losses *before *you use your annual _CGT _allowance if I recall correctly). Also in certain cases (e.g. _eircom_!) working out the allowable purchases costs between different shares (e.g. _eircom _versus _Vodafone _and taking into account the recent _Vodafone _capital repayment etc.) can be tricky!


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## daveg (13 Oct 2006)

I dont think this will apply to be honest it our situation. We have no had to pay CGT before (or this magnitued) nor do I think we will do in the future.


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## ubiquitous (13 Oct 2006)

availability of previous capital losses can indeed be used to reduce CGT bills but in practice unless the individual has incurred significant losses in the past, they are of limited use in this process.


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