Capital Gains Tax on a shared house

U

UncleOrinoco

Guest
Hi,

My brother and I own a house 50/50, and are selling it. It's my primary residence, but his secondary. That leaves me with two questions ...

1. Are we both exempt, both not exempt or am I only exempt from Capital Gains Tax?

2. When calculating Capital Gains Tax, is it simply tax paid on (SellingPrice-PurchasePrice), or do they take into account all interest paid on the mortgage of that property (as a perfectly valid cost in my view)?

Cheers!
 
1) as your Principal Private Residence ( presumably throughout the period of ownership) all gains are exempt from CGT
2) As it is not your brothers PPR his gain is not exempt from CGT
3) Interest on mortgage is irrelevant in computation of CGT. Your share would presumably have been tax relieved at source as your PPR already. His share is not allowable against income as it is not his PPR. It would have been allowable against rental income if he had been in receipt of rental income from the property. (subject to PRTB/Revenue rules on interest)
4) If purchase is post 2002 then CGT would be his share of (S/Price-costs of sale) minus(cost+s/duty if any+legal+enhancement expenditure) less personal exemption x 20%. If purchase is pre-2002 then some indexation on costs would apply.
 
Brilliant, thanks. How is the legal definition of my brother's share defined then? We know it's 50/50 - will the Revenue just assume this or must we declare it as such?
 
UncleOrinoco said:
Brilliant, thanks. How is the legal definition of my brother's share defined then? We know it's 50/50 - will the Revenue just assume this or must we declare it as such?
Click to expand...

Revenue assume nothing. CGT is a self-assessment tax . It is up to the taxpayer to return the gains as per the facts of the case. If that is what you know as fact then you proceed on that basis. As always, in cases such as this, professional legal/tax advice on the specifics of the case is advised. Incorrectly filed returns can, if they result in underpayments, result in serious penalties and or interest charges in the future.
 
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