CGT exceptions on property sale

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Chrisss

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Hi There

Looking for some clarity on CGT exceptions. Property purchased in Nov 2012 and main residence until Feb 2019. Can PPR relief be used in conjunction with 7 years exception when calculating CGT? If yes, how to calculate it? I can't find anything saying only one exception applies. What about the last 12 months relief?
Purchase price €160k
Purchase fees €2500
Sold for €270k in May '23
Selling fees €8k

I would appreciate your advice
 
There is no provision for the interaction of 4 - 7 year relief and any of the other reliefs that apply for capital gains tax purposes.

As the legislation provides two overlapping reliefs you should be in a position to avail of whichever one results in the lowest tax cost in my view.

The property has been owned for 10.5 years approx.

PPR relief will allow relief for 7.25yrs of the period of ownership (6.25yrs plus 12mths).

The 4/7 yr CGT relief (Section 604A) will allow relief for 7yrs of the period of ownership.

PPR relief seems to be the one to claim here as it results in a slight saving.
 
Thank you for your response. Anyone any other opinions on overlapping reliefs?
Just as an exercise I used an online calculator on auctioneera.ie/capital-gains-cgt-tax-calculator which includes both reliefs.
 
Chrisss said:
I used an online calculator on auctioneera.ie/capital-gains-cgt-tax-calculator which includes both reliefs.
Click to expand...

Don't base your tax calculation on the strength of that calculator. You are right to look for some backup/verification. I've given my view, but others may differ.

The source I mentioned above deals with your exact situation - a worked example of a property purchased in the qualifying period, held for more than 7 years, used as a PPR for the first few years, rented thereafter.

I'd be surprised if your particular scenario was specifically contemplated at the design stage of that calculator. It seems to apply the 7yr CGT relief first; then it applies PPR relief to the non exempt gain.

The text below the calculator refers users to a firm of accountants. Perhaps that firm created the calculator and can advise on your specific situation.
 
AAAContributor said:
Don't base your tax calculation on the strength of that calculator. You are right to look for some backup/verification. I've given my view, but others may differ.

The source I mentioned above deals with your exact situation - a worked example of a property purchased in the qualifying period, held for more than 7 years, used as a PPR for the first few years, rented thereafter.

I'd be surprised if your particular scenario was specifically contemplated at the design stage of that calculator. It seems to apply the 7yr CGT relief first; then it applies PPR relief to the non exempt gain.

The text below the calculator refers users to a firm of accountants. Perhaps that firm created the calculator and can advise on your specific situation.
Click to expand...
Sorry to rehash this thread, and I know I've asked similar questions before on another thread, but I have the same query. My previous accountant said go ahead, overlap and use the two reliefs as there is no where to say they can't interact. My new accountant (long story - previous one no longer working for family reasons) says they can't interact and we have to choose one.

In simple terms, bought in 2014, lived in until 2017, rented it out until end 2022 - 8 years ownership.
The s604 relief is 7 of the 8 years obviously.
But if I could use PPR relief, even just the last year of ownership, would that bring the liability to nothing?

Separately, on the calculator referred to above, there is no box for when you sold the property, so how does it calculate the total ownership period!?
 
longwexman said:
on the calculator referred to above, there is no box for when you sold the property, so how does it calculate the total ownership period!?
Click to expand...

Presumably it assumes that you sell at the current date.

As I mentioned above, be wary of that calculator. If you put in a very simple example of:

- a property purchased in Oct 2018 for €100k,
- occupied as a main residence for 4 years (48 mths),
- sold for €200k in Oct 2023 (total ownership period of 60 mths),

the calculator arrives at a taxable gain of €20k when there should be none.
 
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