Capital Gains Tax - what's considered as "incidental costs"

B

biggerry

Registered User
Messages
151
I'm considering selling an investment property in the coming months. I am going to consult an accountant, but I'd like to calculate what CGT I'd be liable for. I've looked at the revenue leaflet on CGT (http://www.revenue.ie/leaflets/cgt1.pdf) and in particular example 1 (sale of an investment property) on page 29. Here it gives the following example:

Disposal Consideration €100000
Less: Incidental Costs € 4000
Net Disposable Consideration € 96000

Page 49 of the above booklet says that Incidental Costs "...is expenditure wholly and exclusively incurred by you for the purposes of the disposal e.g. cost of valuing, advertising and legal expenses." If I use an estate agent to sell the property and they charge 1% commission, is this an "Incidental Cost"?
 
Am in the process of doing the same - except that the property I'm selling was exempt from CGT for a number of years as it was occupied by a dependant relative.

It's my understanding that incidental costs include:

Legal Costs when purchasing property
Stamp Duty on purchase
Surveyor's Fee on purchase
Valuation fee
Legal Costs on sale of property
Estate Agent's Fee + any extra advertising
Any costs incurred for structural repairs/improvements (i.e. anything that was not deductible from rental income)

We are using a tax consultant to submit the details to Revenue on our behalf. If you're in the Dublin area and you haven't located a good tax consultant yet, PM me and I'll give you his details.
 
Small clarification; some of the listed items (Legal Costs when purchasing property, Stamp Duty on purchase, Surveyor's Fee on purchase, Valuation fee) are actually part of the acquisition cost. You still get to deduct them of course, so the tax liability is still reduced. Also, they benefit from indexation (for the period when indexation applied).
 
You must log in or register to reply here.
Back
Top