Capital Gains Tax Private Residence

[Redmond]

Dear Readers

I wonder could somebody help with this question before I get some expensive tax advice.

I purchased my first home in Dublin just about 10 years ago and lived in it for 1 year. I then was obliged by employment to move to the west of Ireland for a few years before returning to live in my home in Dublin for about 6 months before selling in 2005.

During the period I was away from Dublin, I rented the property for periods and declared the income and expenses on tax returns. In the final year of rental this was done under the Rent a Room Relief scheme. After selling, I lived in rented property and then purchased abroad.

Recently I came back to Ireland and the question as to whether Capital gains was due on the Dublin property (my only property-PPR then) has been brought into question. At the time of sale I got advice from an accountant friend that no CGT was due who has since moved to Australia and is out of contact. No documents were written up by that accountant back in 2005.

Having been abroad for past number of years, any papers will be difficult to gather.


It seems according to the Revenue website that as I had to work away from home by reason of occupation, I can be classed as resident in my home and no CGT is due. On the other hand, it also appears that as the rental income was declared in the format of an 'investment-rental home' for some of the time I was away that this hinders the view that it could be treated as my home by merit of working elsewhere.

Does any know what happens in such circumstances? (I suppose the house could simply not be left unattended during my absence if this has any logic in the situation)

I am wondering now if my friend really did give me sound advice or are there factors which could put me at risk for CGT.

Many Thanks if you can help.

Redmond.

 

[Nige]

The fact that you rented the house while you were working in another part of the country does not impact on the relief, provided it was your primary residence immediately before and after you were working elsewhere.

However, the "deemed occupation" of the property while you are working elsewhere only applies if the period of absence was for four years or less if you were still in Ireland. From the information you provided it appears that you were living in the West of Ireland for more than 4 years. If this is the case, some CGT would have been payable on the sale of the house.

 

[Redmond]

Hi Nige
Thank you very much for your comment on this subject. I lived intermittently in the west of Ireland and cumulatively or on a calender basis, my period away from home was certainly less than 4 years.

Am I right in saying then (From your information) that the 'deemed occupation' dominates over the rental income issue with the result that I have no Liability for CGT?

I am concerned that revenue would revisit this CGT issue while I am working abroad (They are doing routine enquiries about persons with property abroad now) and I would not be able to manage their enquiry with all the bank docs and miscellaneous docs back in Irleaned that they might like to see.

Revenue looked at this CGT issue before. I wonder do they have an internal way of closing these issues so that another Revenue district will not go into a revisit of the same issue and require me to come home and dig out all the old docs again?

Many Thanks again

Redmond

 

[Nige]

I don't know how exactly the Revenue system works but once an issue is looked at it is unlikely to revisit it and so I wouldn't be too concerned about the CGT on your former residence.