Tax Calculation Thread

Brego888

Can anyone help me roughly calculate my capital gains tax bill on the sale of my property?

I will be engaging an accountant to look over this for me and help with my allowable deductions but I'm keen to know the ball park figure.

Bought August 2014 - €210,000

Sold June 2022 - €300,000

Primary residence Aug 2014 - Jan 2020 (5 years 5 months or 65 months)

Rented Jan 2020 - June 2022 (2 years 5 months or 29months)

Allowable deductions (solicitors fees purchasing and selling, Estate agent fees etc) roughly calculated for simplicity sake - €10,000

Profit on sale €90,000 - €10,00 allowable deductions = €80,000 that should be taxable for cgt.

CGT is 33%

So the bit I'm struggling to get my head around is working out how much is taxable based on the years that it wasn't my primary residence.

Am I correct in saying that I only pay cgt proportionally for the period it was rented out?

So hear comes the back of the cigarette box calculations.

€80,000 ÷ 94 months (total ownership) x 29 months (period not primary residence) = €24,680

33% of 24,680 = €8144

Is my CGT bill likely €8144 or have a calculated this way off?

namenotavailablE

You're almost right but a few positive things will reduce your tax bill:

1. You're allowed treat the last 12 months of ownership as a period of residence so that brings the 29 months down to 17.
2. You can claim an annual exemption of €1270 against the taxable amount of the gain (80000 x 17/29)

See here: https://www.revenue.ie/en/gains-gifts-and-inheritance/cgt-reliefs/principal-private-residence-ppr-relief.aspx

Donutz

Hoping somebody can help.

My wife and I are jointly assessed. As my wife is a stay at home mother, I was the only one earning a wage and was in the 20% tax band for the first 48000

My wife was awarded carers allowance and declared this to revenue this morning. Since then though, when I log on to my revenue account it says that my 20% rate is only up to 28000. My wife's account doesn't have a band.

I'm hoping that this is only until somebody reviews the information that my wife has sent them and that I will be put back on the 48000 band and my wife will get the 28000 band.

Please tell me if I am missing something.

ari101

Carers allowance is taxed by reduction of tax band and credits, but the amount/allocation of the change seems high.

Has a new tax credit cert issued in your Revenue MyAccount - that should show the amount deducted and why, does this agree to the rate she has been approved for.

You can contact revenue and query if it doesn't add up. I would expect to see her band reduced noticably and the tax credits needed to cover it could spill over into those allocated to you also.

Donutz

https://www.boards.ie/discussion/comment/119546127#Comment_119546127

There hasn't been a new tax cert issued yet. As we are jointly assessed I can look at her tax details when I log on to my account and it doesn't have a tax band for her. It's just blank.

Tried ringing but as soon as the lines open there is a recorded message saying they have a high volume of callers waiting and can't take my call.

I've left a message on the enquiry part of the site but am still waiting to hear back.

I assumed once she was granted carers allowance we could earn up to about 70000 in the lower band.

As it stands now, we could nearly be worse off.

Edit: I've just recieved my amended certificate and the have reduced my band by the same amount that my wife would receive from her carers grant in a full year.

Should it not get reduced by the amount she will receive this year?

Plus, should she have her own tax band?

Sounds like an error on Revenue side. You should still have your standard tax band to €45,800. Was she claiming the home carer tax credit before being granted the carers allowance? Stay on the phone to Revenue, they'll sort it out quickly for you.

Donutz

https://www.boards.ie/discussion/comment/119546424#Comment_119546424

After speaking to somebody in revenue it seems that they have reduced my 20% band by 17342 whice is the amount of carers allowance that my wife would receive in a full year even though she is only gonna receive about 3500 this year. They said that they couldn't ammend their figures and I would have to claim all the excess tax that I have paid because of this in January.

I tried explaining that I probably won't earn a wage for the next few weeks because of this and he basically said tough **** and to claim it all back in January.

SureYWouldntYa

You could easily get a different response from someone else if you ring again with Revenue, they seem to just want to get you off the phone asap

I'm surprised they've reduced it by the amount as if she was to earn it for a full year, at least the weekly rate from now until the end of the year would make some sense

I'd try ringing again if you can, you could get someone more helpful

ari101

Maybe ask to be put on a week1/month1 basis if they can't amend the amount til year end. Then at least you won't lose all pay in a cumulative catch up...?

Donutz

https://www.boards.ie/discussion/comment/119556405#Comment_119556405

My amended tax certificate actually says its for the period 30 August to 31 December on a week 1/ month 1 basis.

Wasn't quite sure what it ment but after having a quick Google it seems I might not get screwed over for the next few weeks.

Donutz

Just another few quick things i wanted to ask if somebody might know the answers.

My wife isn't a PAYE worker so hasn't a tax band. Am I correct in thinking that whatever she gets from her carers allowance in a year reduces my lower tax band threshold by the same amount? I take it that she is not entitled to her own tax band.

Also they gave my wife 1700 tax credits presumably because my wife is now earning an income, but then took away 3648.40 tax credits because of the carers allowance. Does anybody know the reason behind this?

Thanks to everybody for their responses. I'm a bit dim when it comes to all this taxation.

Lord TSC

Quick question about preliminary tax.

I'm declaring losses this year for my business for the first time (Covid and Brexit were real bastards).

Given my tax liabilities are 0 as a result of that (if I've done my calculations correctly), can I say my preliminary tax would also be 0? Given the rule is (re-quoting above) "You pay 90% of the current year, 100% of the previous year, or 105% of the pre-preceeding year. Pick whichever one is most advantageous.", the reality is two of those numbers would both be 0 for me :/

SureYWouldntYa

Yes, your preliminary tax requirement would be zero, no requirement to pay anything

tmh106

For a PAYE worker, what is the deadline for doing return for 2021 (I have a small amount of US dividend income from 2021 to declare). The date on the Revenue website is 31st October, but in previous years I thought this was extended into mid-November if you did the return electronically via My Account. However I can find no information on the Revenue website of this extension for electronic filing. Is anyone able to confirm if I am correct? Thanks.

SureYWouldntYa

https://www.boards.ie/discussion/comment/119724981#Comment_119724981

You're right. The deadline is October 31st, but there is an extension if filing and paying online, this year it is to Nov 16th

I assume it's done like this as 20 years ago they probably wanted to incentivise online returns, although most would be done online now

See below from Revenue

https://www.revenue.ie/en/tax-professionals/ebrief/2022/no-0882022.aspx

tmh106

Thanks @SureYWouldntYa . I did see find that page on the Revenue website, but what made me a little unsure is it references ROS customers whereas I am a My Account customer. My understanding is ROS is more for business owners/self assessed whereas My Account is for PAYE who may have some non PAYE income to declare. But I expect I am overthinking it and the date applies to returns done through either ROS or My Account.

SureYWouldntYa

I can only imagine the deadline is the same, they perhaps haven't stated the deadline is the same whether filing a Form 12 through My Account or a Form 11 through ROS as there is probably so few who file anything via My Account other than basic PAYE info and medical expenses

limos

A quick question if any one can help, I have had my tax rate band reduced by my wife’s carers allowance and she was given 1700 credit, would it be better to swap to the increased tax rate band for a married couple, as I am down from 45k at 20% to 28k everything else is at 40%

limos

I have been having the same problem my wife got an increase in august then I got stung and ended up with no wages one week due to no communication between revenue workers, do you know if its better to use the increased rate of tax and not claim the home carers rate as my 20% tax band has been reduced to 28k, i cannot find any where that tells me which would be better, i emailed revenue they said to leave it until next year and then decide.

John Divney

My wife is trying to file her PAYE for 2019 to claim an overpayment. We are joint assessed on rental income from a property she shares with her siblings. It has been declared and taxed on a form 11 for 2019. On her My Account PAYE, it's prompting her to declare this rental income for 2019 (as it was on record). Should she declare and file even if it's been declared on a form 11? Will this effect her liability for 2019?

SureYWouldntYa

https://www.boards.ie/discussion/comment/119801351#Comment_119801351

The Form 11 that was filed for 2019, does this contain only the income in relation to the rental income? Is the PAYE income not included on this?

She should amend the Form 11 that was submitted in 2019 to reflect both the PAYE and rental income, that is what would be correct. I can't say if overall there will still be an under or over payment.

John Divney

https://www.boards.ie/discussion/comment/119804715#Comment_119804715

Thanks for replying. Yes it was a joint assessment form 11 with both PAYE Incomes itemised. It was done by an accountant for that year. It got a tax clearance number.

In her My Account to file the PAYE for the year it also has the wrong rental income number pre populated (which can be changed). Waiting on revenue to reply to my enquiry but who knows when that will happen. It seems weird to declare it twice, considering that's the whole point of the Form 11.

relax carry on

https://www.boards.ie/discussion/comment/119805055#Comment_119805055

I don't see how she can file a PAYE return via MyAccount when you've already filed a jointly assessed form 11 for both of you for the same year? That shouldn't be possible. You should be getting an error message telling you you or your spouse were registered for it in the year.

John Divney

https://www.boards.ie/discussion/comment/119806848#Comment_119806848

Revenue sent a letter about an overpayment on the PAYE account for 2019 and that is must be claimed this year or it can't be claimed. (But to claim it must be done on my account, I believe this was recently introduced).

relax carry on

https://www.boards.ie/discussion/comment/119806915#Comment_119806915

Then Revenue don't have her registered for income tax in 2019. You can only file via MyAccount if you aren't registered for income tax or jointly assessed with someone who is. So who was registered for income tax in 2019 and who was the assessable spouse on the form 11? You'll need to speak with Revenue to figure out what their records show for 2019.

John Divney

https://www.boards.ie/discussion/comment/119807552#Comment_119807552

She is registered, it's there in My Account->Review your Taxes 2018-2021, her PAYE income for the past 4 years. It said overpayment for 2019, and to claim overpayment you must request a statement of liability.. When I go into that it shows her PAYE income and then says that the rental income for 2019 is on record, and asks to enter that aswell. Since it's already been done on a form 11, I don't know if I put the rental income in, will it be taxed as new?

Is the 31st the deadline to claim this for 2019 or is it the end of the calendar year (for PAYE overpayment)

relax carry on

https://www.boards.ie/discussion/comment/119809739#Comment_119809739

That's literally not the way it works. If she has an active income tax registration for 2019 and has filed a form 11 for 2019 where she received a notice of assessment as the assessable spouse then she shouldn't be able to file another tax return under PAYE for 2019 via her Revenue MyAccount. If she can login to her revenue MyAccount and see the information you say; it means that whatever form 11 she filed isn't linked to her 2019 record. Contact Revenue to see why that is before you do anything else. The 31st deadline is not an issue in your circumstances.

John Divney

https://www.boards.ie/discussion/comment/119810229#Comment_119810229

Sorry, I should have made it clear the Form 11 was jointly assessed under my account, she didn't file it. The accountant did.

relax carry on

https://www.boards.ie/discussion/comment/119812239#Comment_119812239

Then the accountant made an error with who was the assessable spouse in the year it sounds. If you were set up as jointly assessed on Revenues systems, the system would pick up that one spouse had an active income tax registration in the year and wouldn't allow the other spouse to file a PAYE return. It would give and error message. Time to contact Revenue and find out what their records show for 2019 for both of you as it sounds like you have already filed a Joint assessment return but your spouse's records don't reflect that.

glut22

Hi there would really appreciate clarity on capital gains tax. If a house is bought (for example) at 200k and sold at 300k but the seller paid 20k in mortgage interest over the time owning it, is the profit for cgt 100k or 80k?

I.e. is mortgage interest deducted. Thanks

relax carry on

https://www.boards.ie/discussion/comment/119883301#Comment_119883301

No

Geuze

https://www.boards.ie/discussion/comment/119883301#Comment_119883301

Mortgage is completely irrelevant to CGT.

There are other allowable deductions, e.g. buying and selling costs.

dickface

Stupid question incoming.

Can we claim working from home relief on the government electricity credits or just the money we actually paid ourselves ?

ari101

https://www.boards.ie/discussion/comment/120070971#Comment_120070971

Just the amount paid - when you upload bills it asks you to input amounts paid in the year.

banie01

Quick question that I'm looking for a steer on. Due to Ill health I've retired early and I'm on the cusp of drawing down my pension. Will likely take the full amount in cash rather than buying an annuity.

I know I've got the 25% tax free and I'm due tax at marginal rate on the remainder. Is there any other allowance or tax reduction I can avail of to drop the balance of the tax owed?

Curreently taxed as a married couple with my credits allocated to the Mrs as I finished up and was placed on Invalidity Pension a couple of years ago.

Any steer would be appreciated.

Sono Topolino

https://www.boards.ie/discussion/comment/120096056#Comment_120096056

If you don’t need the full cash now, ARF the remainder. The ARF can keep 50% of the value of the fund in cash with the remainder invested in a portfolio of assets. Transferring your pension into an ARF is tax free and you will likely need some of those funds in future years. Drawdowns from the ARF will be taxed as normal. Also whatever remains in the ARF will form part of your estate on death - i.e. your surviving family can inherit it.

Sono Topolino

https://www.boards.ie/discussion/comment/120071226#Comment_120071226

Correct - however you don't actually need to upload any bills to get a figure. You can just include an aggregate number for each category and keep the records for 5 years in case you get audited. The chances of them opening a Revenue compliance intervention over a few hundred quid is, however, negligible.

nhg

https://www.boards.ie/discussion/comment/120099700#Comment_120099700

For remote working relief for 2022 & going forward you must uploads the bills as 30% relief allowable

GBX

Question on the WFH allowance. If I work out my electric amount paid for the days worked, do I deduct the govt credit on top or is this ignored ?

Sono Topolino

https://www.boards.ie/discussion/comment/120102131#Comment_120102131

As outlined above, the credit is based on the amount paid - so net of the credit.

nhg

https://www.boards.ie/discussion/comment/120102131#Comment_120102131

You don’t need to do any calculations for Remote Working Relief, the system will do all of that.

You need to input the amount you paid for each service being claimed for in the year and upload a copy of the bills to match the claim i.e. you upload all electricity, heating & broadband bills for 2022. (In terms of broadband if your supplier also provides you with a tv package, you enter the amount that’s for broadband only but you upload the invoice which displays the full amount including tv)

You have to enter the number of days you worked remotely in the year. You will also be asked if you received a contribution from your employer, if yes the amount received.

The system will do the rest.

GBX

Super, thanks. Wasn't sure. Appreciate the replies.

Jamie2k9

I have a question on WFH releif.

I rent in Dublin and rent is part of bills so I don't see the bills.

I was hoping to just claim off my family home's bills even though I didn't make a financial contribution to them via offical channels anyay. I was home during 2020 working remotely and hve access to all the bills in my parants names. I have access to those for 2021/2022 as well.

I just want to see what revenue would think about this as they say you need to show evidence you contribated.

Its a pretty small amount probablly less than 100 quid per year but I am just worried if they audited.

Sono Topolino

As I understand it, you need to be the account holder to claim the relief. The gas bill here is in my wife’s name and although I contributed towards it i can’t claim the credit.

tmh106

Does anyone know if the WFH relief is covered under the four year rule or do I have to claim it by Oct 31 of the following year? For example, can I still claim relief for 2021 or am I too late? Thanks.

relax carry on

https://www.boards.ie/discussion/comment/120114043#Comment_120114043

It's just like any other credit/relief; you have up to 4 years to claim it by filing/amending your tax return for the relevant tax year.

Dave_D_Rave

Lads would anyone be able to do a quick calc for a combined PAYE & Ltd income in a year.

Income from PAYE would be €80,000

Income from Ltd 40,000

Pension Contribution from Ltd 24,000

High level would do.

Any advice appreciated.

Madeoface

https://www.boards.ie/discussion/comment/120344059#Comment_120344059

The PWC site has a very quick tax calculator. Try that.

Dave_D_Rave

Thanks I am familair with that website its very useful; but it doesnt allow you to include a Directors Pension from the Ltd earnings (That I can see).

It looks to mee that it only allows Pension contributions from the PAYE income

Sono Topolino

https://www.boards.ie/discussion/comment/120344387#Comment_120344387

Is there a reason you think that a company pension contribution is a BIK? I thought Finance Act 2022 changed that.