Capital Gains Calculation

[FirstaidKit]

Hi, I was asked to sell a site for a one off house for €80k (1 acre), is my capital tax gains calculation correct?
€80,000 site
-€10,000 ( original value of land inherited 22 years ago)
€70,000 balance
-€1270 yearly exemption
€68,730 to tax @33%
=€22,680 in tax?

Also what other costs am I likely to incur like stamp duty, solicitors etc?
Thanks in advance.

 

[ClubMan]

-€10,000 ( original value of land inherited 22 years ago)

Indexation relief up to 2003 may apply here:

Indexation Relief

This page is an explanation of indexation relief for Capital Gains Tax (CGT)

www.revenue.ie

Also what other costs am I likely to incur like stamp duty, solicitors etc?

The usual expenses that apply to the sale of land. The ones that you mention. Estate agent costs perhaps. As the seller you shouldn't be liable for stamp duty?

Who has to pay Stamp Duty?

Information in relation to who is liable to pay Stamp Duty

www.revenue.ie

Some expenses can be set against the capital gain when calculating the CGT liability. The following are just selected examples - check the Revenue guidance documents and tax manuals for further details if necessary:

How to calculate CGT

This page explains how Capital Gains Tax is calculated

www.revenue.ie

What are ‘allowable expenses’?​

These are costs that you can deduct from the sale price to work out your chargeable gain. They can be:

• 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.

Previously incurred capital losses can also be written off against a capital gain.

If you make a loss

This page is an explanation of how losses affect CGT

www.revenue.ie

If in doubt get independent professional advice.

 

[T McGibney]

If you originally inherited the site as an integral part of a larger holding, its sale now may constitute a part-disposal for CGT purposes which would complicate the CGT calculation.

€10,000 for a potential house site in 2002 looks very low.

Get professional advice before you commit to sell.

 

[deadlyduck]

You'd also need to be aware of possible development land rules if the original site valuation includes a premium for development potential, although a €10,000 valuation looks very low so it might not be an issue.