Capital Gains On Agri Land Sale

T

tred

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Hi,
I have being searching for an answer to this on Revenue.ie, and cant seem to get a proper answer. My Dad inherited a piece of land in the early 70's. He sold this piece of land recently, for a sum of 10K. Now the land is boggy and good for damn all. the question on this is, is he liable to pay capital gains on this land?.
Tom
 
The area of land must have been extremely small if he only got 10k for it. Its unlikely that he will have much of a CGT liability once the proceeds are this low as presumably the land had some value when he purchased it. This value should attract indexation relief and the first €1270 of your dad's gain will be exempt from CGT (this is doubled if the land was jointly owned).
 
ubiquitous said:
The area of land must have been extremely small if he only got 10k for it. Its unlikely that he will have much of a CGT liability once the proceeds are this low as presumably the land had some value when he purchased it. This value should attract indexation relief and the first €1270 of your dad's gain will be exempt from CGT (this is doubled if the land was jointly owned).
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Very small Boggy area of land. How can i work out with indexation relief what might be owed if any. Is there a possibilty theere might be none?. Hes asmall farmer, and the sale was made due to some hasssle over the piece in question.

Many thanks for quick response by the way.

tom
 
ClubMan said:
Have you checked the [broken link removed]? Also, where no special (e.g. agricultural land) exemptions or reliefs apply Ishmael Whale's CGT calculator might be useful.
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I checked revenue guides but not so clear. The Solictor told him that there was not CGT liability, but i am being paranoid and id like to see it on revenue documenation that there is not!. Dont want to see him up on some tax avoidance list in the independent!!!
 
What age is your father? If he is over 55 he can avail of a retirement relief which would mean no CGT. If not, did he inherit the property prior to 6th April 1974? What were his expenses on the sale? Is it in his sole name or the joint names of himself and his wife?
 
I checked revenue guides but not so clear. The Solictor told him that there was not CGT liability, but i am being paranoid and id like to see it on revenue documenation that there is not!. Dont want to see him up on some tax avoidance list in the independent!!!
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Your dad's CGT position will depend on the circumstances of his own situation as much as on the CGT rules that apply to him. This is because most aspects of the rules of CGT are subject to terms and conditions. Because some of these terms and conditions are relatively complicated (for example those relating to Retirement Relief as mentioned by Vanilla), in most cases it would be impossible for you or anyone else to properly verify the position simply in the basis of what you might find in revenue.ie or in other publications.

If you have any reason to doubt your solicitor's advice, why not ask for it in writing, or at worst pay for a second option.
 
A brief answer.

If he acquired the land on or before 06/04/74 and it was worth 1497 EUROS or less at that time no Capital Gains arises if sold in 2004 or after for €10,000. As someone already mentioned you could also deduct legal costs and enhancement expenditure. This would help if the land was valued at less than 1497 EUROS.
 
taxadvisor said:
A brief answer.

If he acquired the land on or before 06/04/74 and it was worth 1497 EUROS or less at that time no Capital Gains arises if sold in 2004 or after for €10,000. As someone already mentioned you could also deduct legal costs and enhancement expenditure. This would help if the land was valued at less than 1497 EUROS.
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Excellent. Thats just what i needed to know. id say it was worth ten euro in 1974 lol!!!. Thannks for all the help and answers today folks.

Tomas
 
If he acquired the land on or before 06/04/74 and it was worth 1497 EUROS or less at that time no Capital Gains arises if sold in 2004 or after for €10,000.
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Hi there taxadviser, I don't understand the 'or less' bit- could you elaborate please?
 
If he acquired the land on or before 06/04/74 and it was worth 1497 EUROS or less at that time no Capital Gains arises if sold in 2004 or after for €10,000. As someone already mentioned you could also deduct legal costs and enhancement expenditure. This would help if the land was valued at less than 1497 EUROS
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This is clearly incorrect and should presumably read 1497 euros or more - a valuation that would be hard to justify for poor, boggy land in 1974. Note that any element of value (at the date of acquisition) arising from potential development is ineligible for indexation.

Tomas,
As I said above, you are in all probability wasting your time trying to second-guess your solicitor's advice and you or your dad really need to have him explain his reasoning if you have any reason to doubt him.
 
ubiquitous said:
This is clearly incorrect and should presumably read 1497 euros or more - a valuation that would be hard to justify for poor, boggy land in 1974. Note that any element of value (at the date of acquisition) arising from potential development is ineligible for indexation.

Tomas,
As I said above, you are in all probability wasting your time trying to second-guess your solicitor's advice and you or your dad really need to have him explain his reasoning if you have any reason to doubt him.
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Thanks folks.
 
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