Tax on selling an apartment lived in Yrs ago

T

terenure1

Guest
I am selling an apartment which I lived in up until about 17 years ago when I got married.

I lived in the apartment for 10 years after I bought it and am not sure what the value of it would have been back in 1995 (when I got married and moved out) but I would presume that I would not be liable for capital gains on the increase in value during the ten years I lived there?

How would I

a) Find out the value of the apartment when I moved out (back in 1995)?
B) Find out todays equivalent value (taking account of inflation etc)?

Presumably my capital gains liability would be the difference between B above and the amount I am selling it for.... (which seems to be ridiculously low!)? Am I right?

Thanks
 
The value on the date you moved out is irrelevant.

The formula is:

Sale price
less cost of sale

less:
(Purchase price + cost of purchase) x multiplier for inflation up to 2004(?)

equals Gain.

You can then deduct for the period the property was your ppr plus last 12 months of ownership, in your case 11/17 years (I believe Revenue prefer more specific, monthly calculations).
 
Thanks. I am wondering what the relevance of 2004 is and where I would find out the multiplier for inflation you refer to?

I have owned the apartment for 27 years (the first 10 of which I lived in it as it was my principle private residence (PPR) then the last 17 it hasnt been my PPR.
 
Sorry, rereading your original post you were clear on that. Your ppr relief would be 11/27.

2004 is the year indexation relief was abolished by the Minister for Finance.

The multipliers are [broken link removed], scroll down to second last pdf linked to.

Have a read of the rest too :D
 
Thanks for this Mrs Vimes
I had a read of those multipliers so as far as I can make out the liability should be as follows applying the formula (using nominal figures)

200K (sale price) – 10K (Cost of sale) = 190K

80K (Euro equivalent of Purchase price) + €2k (cost of purchase) = €82K
82K x 1.819 (multiplier from purchase in 1985 to 2004) = €149k

€190k (sale price) - €149k (cost of sale using multiplier) = 41K (Gain)

41K (Gain) – 16K (11/27 – the number of years in was the PPR) = 25K

25k (Gain) * 25% = €6,250 Capital Gains Tax

Do you know what proof revenue will require in relation to working out the 11 years (i.e. would I need to produce proof that I lived there and what proof would I need?)
 
Hi again Terenure,

Without checking your maths, your calculations above seem to be in order. You also have an annual threshold of €1,270 to deduct, ie 25000-1270=23730@25%=5932.50.

With regard to proof of living in the property - only if Revenue decide to audit your claim to PPR relief would this become an issue and in that case if it is on their records as having been your address that may suffice, otherwise bank statements, utility bills etc would presumably be required.
 
Thanks to you both

Could I do the return myself or would I be more likely to have no hastle of an audit if I were to get an accountant to do it?
 
terenure1 said:
Thanks to you both

Could I do the return myself or would I be more likely to have no hastle of an audit if I were to get an accountant to do it?
Click to expand...

It's up to you. That said, Revenue now examine all CGT returns very closely, and the risk of audit is high. If they find a real or apparent underpayment of the CGT liability, they won't be shy in recovering it, with interest and penalties. A good accountant or tax consultant will use methodologies in preparing CGT computations and returns that will minimise this risk.
 
Thanks for that. I hope I can find a good one.

Would I need to prove that it hasnt been rented for those years, just used as a second property nearer work?
 
terenure1 said:
I hope I can find a good one.
Click to expand...

Recommendations from friends, family, colleagues are always your best bet in sourcing any professional service provider. I would use directories, phone books etc only as a last resort.

terenure1 said:
Would I need to prove that it hasnt been rented for those years, just used as a second property nearer work?
Click to expand...

For the purposes of a CGT computation, no.
 
T McGibney;1278849 A good accountant or tax consultant will use methodologies in preparing CGT computations and returns that will minimise this risk.[/QUOTE said:
Thanks, in relation to the above. Would the accountant not use the formula as above? Are there other ways of working out the capital gains liability?
Click to expand...
 
Thanks.... like what?

I am trying to get an idea of my CGT liability in order to aid my decision on the sale price. Should I expect that something is going to come out of the woodwork besides the figures used in applying the formula above?
 
Hi All

If I am to sell in October 2012 when would I need to do the CGT return?
 
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