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CGT & CAT Query

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  • 02-03-2020 9:48pm
    #1
    edenbridge146
    Registered Users Posts: 153 ✭✭


    Hi folks
    Hoping I can get advice on the following scenario

    Mr 41 year old brother passed in 2014 and willed his house to our parents as he wasn't married or had any children. As a result, our parents moved into his home. All squeaky clean and inheritance tax etc all paid

    As a result the original family home the parents lived in for 40 years was left idle.
    It wasn't rented out. House is worth about 80,000.
    Its an older terraced 2 bed corporation houses built on the street.
    Then my brother separated from his wife and dad offered him to stay there rent free, just to pay the utility bills etc.
    So the brother moved in in 2015 to 2020.

    The brother now wants to move on as he has met somebody else and wants to move in together in a bigger more modern home etc with a garden.
    Our dad is concerned that if he sells it, he will have to pay CGT but from what i've read on Revenue site, dad hasn't rented this house so not liable for CGT ??

    I could be mistaken though - could somebody clarify ?
    Tagged:


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    #2
    Calahonda52
    Registered Users Posts: 12,408 ✭✭✭✭Calahonda52


    Is the test not what is his PPR? and not whether it is occupied or not
    did he pay LPT on both?

    “I can’t pay my staff or mortgage with instagram likes”.



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    #3
    edenbridge146
    Registered Users Posts: 153 ✭✭edenbridge146


    Calahonda52 wrote: »
    Is the test not what is his PPR? and not whether it is occupied or not
    did he pay LPT on both?

    Yes LPT paid on both properties

    In 2015, by the time probate was sorted etc, the original family home became the non PPR
    This house is not rented out

    So should he look at the Property Price register in 2015 and compare to Price of Property now and that should calculate if CGT is liable ?


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    #4
    davindub
    Registered Users Posts: 1,447 ✭✭✭davindub


    edenbridge146 wrote: »
    Yes LPT paid on both properties

    In 2015, by the time probate was sorted etc, the original family home became the non PPR
    This house is not rented out

    So should he look at the Property Price register in 2015 and compare to Price of Property now and that should calculate if CGT is liable ?

    If you google it, you will find partial principle private residence relief there is a formula to use.


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    #5
    Pawwed Rig
    Moderators, Category Moderators, Home & Garden Moderators, Recreation & Hobbies Moderators Posts: 22,377 CMod ✭✭✭✭Pawwed Rig


    It is liable to CGT but it shouldn't be too much. Make sure they have proof of where they were living each year.
    Probably a tax planning opportunity here tbh if your parents are elderly.


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    #6
    user.name
    Registered Users Posts: 283 ✭✭user.name


    The house will be liable to CGT on disposal. However, the PPR relief will partly kick in based on the period in which they lived in the house plus 12 months deemed occupancy at the end of ownership. For example, they owned the house for 40 years and lived there for 35 years before moving into the other house. The value of the house is 80,000 so €72,000 (80,000 x 35 +1 yr deemed occupancy/40) is exempt. The CGT would be assessed on 8,000 @ 33%.


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    #7
    Marcusm
    Registered Users Posts: 10,320 ✭✭✭✭Marcusm


    user.name wrote: »
    The house will be liable to CGT on disposal. However, the PPR relief will partly kick in based on the period in which they lived in the house plus 12 months deemed occupancy at the end of ownership. For example, they owned the house for 40 years and lived there for 35 years before moving into the other house. The value of the house is 80,000 so €72,000 (80,000 x 35 +1 yr deemed occupancy/40) is exempt. The CGT would be assessed on 8,000 @ 33%.

    Except the 80k is the value of the house not the gain. OP, what did they buy the house for)


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