How to calculate our CGT?

[DubsB]

We currently have our house for sale and are trying to figure out roughly how much cgt we will be liable for. Our situation is that we bought a house in Dec 99. After 8 mths we were posted abroad with work have been living abroad ever since. We have rented the house out since august 2000.

Our figures are - bought our house for 200k euro
Currently worth approx 460k euro

What can we offset against the cgt or is it just a clear cut calculation? Being abroad makes it more complicated as i think we may also be liable for tax in the country we're currently living in too (Switzerland)

Thanks!

 

[ClubMan]

We currently have our house for sale and are trying to figure out roughly how much cgt we will be liable for. Our situation is that we bought a house in Dec 99. After 8 mths we were posted abroad with work have been living abroad ever since. We have rented the house out since august 2000.

I presume this means that you were liable for a clawback of stamp duty? Did you pay this?

 

[DubsB]

Hi - I wasn't aware of this, so no we haven't paid it. Can I ask how it's calculated (the revenue website seems vague)? We were first time buyers in 1999. Do you know how much stamp duty a first time buyer would have paid in 1999- I think it was 4% as we paid about 7600K (6k irish punt)?


Thanks

 

[ClubMan]

In the recent past the clawback applied when one bought as an owner occupier but then rented the property out within the first 5 years of ownership. (This was reduced to 2 years in Budget 2008 but this is irrelevant here). When the clawback triggered then the owner was liable for the difference between the SD that an investor would have paid on the original purchase and what s/he actually paid (which might be nothing if it was SD exempt - e.g. new build). I don't know for sure if this SD clawback with those rules applied in 1999/2000 but I suspect that it did. You need to find out for sure and then figure out the rates applicable at the time and thus the liability outstanding. It's possible that interest and penalties may apply for discharging this liability so late.

Your original query about CGT liability may be complicated by your residency and/or domicile status. You may need professional advice from somebody with expertise in the tax codes of both jurisdictions in question.

 

[DubsB]

Thanks for that clubman.

I have another question. I found the following information on the revenue website regarding CGT. It seems to say that if we lived in the house for a while before selling it that we could be exempt from some of the CGT because of being posted abroad for work and working abroad - does anyone know about this?

"The exemption is also restricted where the taxpayer has not lived in the house for long periods. However, a period of up to twelve months immediately before the end of the period of ownership is treated as a period of occupation even though the owner may not have been actually living in it during that period.

In addition to the twelve months referred to above, the following periods of absence from the house are also regarded as periods of occupation​

​

provided that, both before and after those periods, the
house was the owner’s only or main residence and that throughout those periods he/she had no
other house eligible for exemption:-​

(i)​

​

any period throughout which the individual was employed outside the State
and​

(ii)​

​

a period of up to four years during which the individual was required by the conditions of his/her​

employment to reside elsewhere."

Thanks!

 

[madmoe]

I just read below that since Budget 2008 the SD clawback term seems to have been reduced to two yeas from five. Myself and a co-owner have lived in our property for just over two years now. We are hoping to rent it out soon. Can you advise me if we are liable to clawback of the stamp duty? We did not pay any when we bought it as we were both first time buyers and the property was brand new.

Cheers,
M

In the recent past the clawback applied when one bought as an owner occupier but then rented the property out within the first 5 years of ownership. (This was reduced to 2 years in Budget 2008 but this is irrelevant here). When the clawback triggered then the owner was liable for the difference between the SD that an investor would have paid on the original purchase and what s/he actually paid (which might be nothing if it was SD exempt - e.g. new build). I don't know for sure if this SD clawback with those rules applied in 1999/2000 but I suspect that it did. You need to find out for sure and then figure out the rates applicable at the time and thus the liability outstanding. It's possible that interest and penalties may apply for discharging this liability so late.

Your original query about CGT liability may be complicated by your residency and/or domicile status. You may need professional advice from somebody with expertise in the tax codes of both jurisdictions in question.