Capital Gains Tax calculation

M

meular

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I bought a house in the UK in 1999 for £95,000, have a buyer who is interested in purchasing in purchasing it now for £200,000. I was resident there until early in 2007 and this property was my principle private residence. I am now resident in Ireland. I believe that there are exemptions for the years I lived in the house and for 12 months after leaving but I am not sure on what figure (in general terms) the 20% CGT rate is calculated. Can anyone advise me? Many thanks
 
200,000 - 95,000 = 105,000 capital gain, give or take incidental selling/purchasing costs

It was your PPR from 1999 to 2006 - say 7 years
You owned it from 1999 to 2008 - say 9 years

Deemed PPR 7 + 1 = 8 years
% of gain liable to tax = (9-8) / 9 = 1/9 = 11%
Taxable gain = 11% x £ 105,000 = £ 11,550 @ 20% = £ 2,310

All £ figures should be translated in € using rate at time of purchase and sale.
 
I'd advise that you get this checked with an accountant- there are a couple of points about your case that may have a bearing on the tax liability:


  • You need to check if your tax status in Ireland is "resident"/"ordinarily resident". In essence, if you aren't resident/ordinarily resident in Ireland you MAY not have a tax liability on the sale of a UK property.Being resident/ordinarily resident depends on how long you have been in Ireland since returning. If you're here more than 3 years, you are ordinarily resident and will face a CGT liability, pretty much as indicated in the previous point.
  • You should also check if you can get any "Double Taxation Relief [DTR]" for any tax you owe on the sale to the Inland Revenue in the UK. DTR works by ensuring that you don't pay tax twice on the same income/ gain. Depending on the relief, you might only have to pay UK tax and nothing in Ireland or maybe get a deduction from the Irish CGT for the amount of the UK tax
Anyway- get professional advice!
 
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