CGT for Investment Property

M

Maverick

Guest
Hi there,
I have an investment property in Dublin. However recently I have been asked by my company to work abroad for a little while. The new country of work has a dual tax treaty with Ireland. However it doesn't have CGT on sale of assets. If I am paying Income tax on my earnings there, and if I sell my investment property in Dublin, then where do I pay the CGT? Do I pay it in Ireland even though I am not working here, or do I declare it in the new country where I wouldn't have to pay any CGT. What is the normal process for a dual tax treaty country. I presume that I have to continue to pay tax on rental income in Ireland (despite the dual tax treaty). What's the story with CGT on sale of the property? Can anyone help me out?

Thanks
M
 
You are liable to Irish CGT on the disposal of Irish real property (i.e. land and buildings) regardless of your tax residence. This is the norm in all tax jurisdictions as regards the sale of real property.
 
And can anyone help me with suggesting what expenses and things can I offset against the profit before paying CGT. I know I can offset the selling agent's fees and the solicitor's fees (both at the time of purchase & sale). But what about stamp duty on the property, and any renovations made before sale?
And if there are repairs done during the last few months of tenancy, then do I offset it against CGT or against the Rental Income?

M
 
Can someone also advise when I should pay the CGT on the sale of the property. Is it
- immediately when I dispose off the property? OR
- is it before the 31st of October of the same year or the following year?

Any links on the revenue site about this?

Thanks again
M
 
MOB said:
You are liable to Irish CGT on the disposal of Irish real property (i.e. land and buildings) regardless of your tax residence. This is the norm in all tax jurisdictions as regards the sale of real property.
Click to expand...

For completness.....
I looked into dual tax treaty few moths ago...as well as CGT on disposal of property as explained by MOB, i think you are also liable for irish tax (rate?) on rental income if you are resident abroad and rent your irish property.

The dual tax treaty can be basically split in 2 sections
- income (from anything other than property) = pay tax in country of residence
- income from property (sale / rent) = pay tax in coutry where property is

The dual tax treay is available online and is fairly short, so have a read at it.
 
Maverick said:
...But what about stamp duty on the property, and any renovations made before sale?
And if there are repairs done during the last few months of tenancy, then do I offset it against CGT or against the Rental Income?
Click to expand...

Stamp duty on purchase is a cost of acquisition and is traeted same as legal fees on acquisition.

repairs etc. unless major works (extension, new chimney etc) will be set against rental income.

When is tax due?

Depends on when you sell. If you sell between 1/1/05 - 30/9/05 tax is due 31/10/05. If sell between 1/10/05 and 31/12/05 tax is due 31/1/06.
 
Does the installation of a new bathroom and kitchen consitute "major works" offestable against CGT on a sale or does t constitute "repairs" offestable against rental income in the period immediately preceeding the sale of the investment property as thecoments seem a bit vague on this ?
Also is Stamp Duty paid on the purchase of the property offsetable against CGT on a sale of a rented property ?
 
modestus said:
Does the installation of a new bathroom and kitchen consitute "major works" offestable against CGT on a sale
Click to expand...

Yes - CGT offset

"Also is Stamp Duty paid on the purchase of the property offsetable against CGT on a sale of a rented property"

I already answered this - YES
 
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