Inherited House - tax implications?

B

butterfield

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Inherited house from parents about 10 years and now want to sell this - at the time value was maybe €50,000. Value now maybe over €500,000.

Will the capital gains tax be calculated on €450,000 profit ??

or

Is the €50,000 indexed linked and capital gains paid on whatever this amount??

Somehow I suspect its the first option!! Anyone know please ??
 
Indexation was abolished in 2002, so you only get indexation for the years before that. If you inherited the house in the 96/97 tax year, the indexation factor is 1.251 (so you are treated as if the house cost €62,550). If you inherited the house in 97/98 the indexation factor is 1.232.

Using the 1.251 indexation rate, your gain will be €437,450 and your tax would be 20% of this which is €87,490.

If this house has been your principal private residence at any stage during your ownership, the tax will be reduced (or possible eliminated in full).
 
Don't you need to take into account the exemption threshold?
See [broken link removed]for details
 
bacchus said:
Don't you need to take into account the exemption threshold?
See [broken link removed]for details
Click to expand...

No. The OP is SELLING what he previously inherited. Presumably at the time 10 years ago the value at €50,000 would have been within his Class 1 threshold ( assuming no other gifts or inheritances. CAT is not relevant to this transaction here, only CGT ( if full PPR relief not available )
 
Thanks for replies, actually house was inhereted in 1989 - does this change anything ?? So is it indexed linked up to 2002 ??

Thanks again.
 
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