Calculate CGT when selling rental property

We are considering selling our rental property that we bought in 1997 (Pre Euro..in old money). In order to calculate the 33/ CGT, I understand we need to index the purchase price using revenue's index of 1.232 and add the costs of purchase etc. for deduction. Are the selling costs also deductible before calculating the CGT?

So far we have taken into account costs when purchasing the property, such as solicitor fee advertising and stamp duty. As the house was purchased by both husband and wife, can we also add twice the personal allowance rather than just one. Are there any other costs deductible, for example we put in a new kitchen and bathroom a few years ago and updated the floors throughout the property. Are these costs deductible?

Thanks in advance.

Selling costs are deductible

2 x personal allowance - you split the gain in two and report each on the form

Not sure about kitchen, bathroom and floors but they will probably be allowed as enhancement expenditure but you would need to be able to justify the costs ie have you invoices, etc

From the Revenue website

When calculating your CGT liability, you may deduct the following items:

• the cost of purchasing the asset
• any money spent by you which adds value to the asset (known as 'enhancement expenditure')
• costs (for example, fees paid by you to a solicitor or auctioneer) when you acquired and disposed of the asset.

You may adjust the purchase price and enhancement expenditure for inflation. This is called indexation relief.

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Did you ever live there?

Thanks for that update. We do have all the receipts for kitchen, bathroom floors etc. We did claim tax relief on that expenditure already so does that effect any claim re CGT?

It has always been a rental property so we never lived in it.

One other query..do we convert the original Punt rate paid for the property to Euro. Does revenue have a particular formula for that too or can we use the rate that existed at the time. We have a record of that so it should be easy enough to do that conversion.

Broadcaster said:

Thanks for that update. We do have all the receipts for kitchen, bathroom floors etc. We did claim tax relief on that expenditure already so does that effect any claim re CGT?

It has always been a rental property so we never lived in it.

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If you claimed tax relief for these expenses against the rental income, then you can not claim tax relief again for CGT. You only get once chance to claim relief!

Punt to euro: multiply punt value by 1.269738078

Broadcaster said:

Does revenue have a particular formula for that too or can we use the rate that existed at the time

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All the currencies had a fixed rate when they were changed to euros - The fixed conversion factor for the Irish pound was €1 = IR£0.787564.

Thanks for those replies. I assume then that I use 0.787564 for the conversion of Punts to Euro rather than the multipler mentioned by vandriver and then use the Reveunue's index multipler of 1.232?

Broadcaster said:

Thanks for those replies. I assume then that I use 0.787564 for the conversion of Punts to Euro rather than the multipler mentioned by vandriver and then use the Reveunue's index multipler of 1.232?

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They're the same figure

€1.00 = IR£0.787564
IR£1.00 = €1.269738

But yes you convert the punt value to Euros (which should result in a higher figure) and multiply that by the indexation factor of 1.232 to give the original cost

Don't forget to do the same for solicitors fees etc which you would have paid out when you bought the place

DB74 said:

They're the same figure

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Well, they're close, 1.269738 != 1.232.

The official way to convert local currencies to euro is to divide the local currency by the euro equivalent, not multiply by 1/rate

The 1.232 is the Revenue Inflation adjustment of capital expenditure pre-2003 - apparently, inflation disappeared after 2003!