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CAT and CGT if selling the inhetited house under its evaluated value

  • 07-08-2024 8:51am
    #1
    alhaj
    Registered Users Posts: 2 ✭


    Hi all,

    I would appreciate some advice.

    I am from another EU country, but I have lived in Ireland for more than 17 years, and I haven't visited my country more than four times. My mother died in 2019 (in my country of origin), and this year, I finally got the official inheritance sorted by a notary (in my country, we call such a person like this, but I wonder whether in Ireland it is an executor) I inherited half of the house with a garden that was evaluated at 13.400 € in 2019 and the whole 935 € in her personal and savings account. The above valuation was used in the legal process of getting my part of the inheritance.

    1. Am I correct in saying that if I do not reach 80% of the 335.000€ threshold, I do not need to pay Irish CAT?
    2. Is there any other inheritance tax I would need to pay?
    3. Do I pay any CGT on the 2.000 € I received for selling the house? The buyer was not my relative.
    4. If I need to pay the CGT, what documents will I need to submit? (Unfortunately, I only have the contract for the sale and my bank statement showing that I received the money.)

    Thank you for all your help.



Comments

  • #2
    SureYWouldntYa
    Registered Users, Registered Users 2 Posts: 7,787 ✭✭✭SureYWouldntYa


    Your numbers appear to be a bit off but that might be a result of your natural language and the shorthand for numbers that you use.

    To answer your questions:

    1 - You do not need to even file a return unless you reach 80% of the lifetime allowance of €335,000. Tax is only due once you receive gifts or inheritances above this amount.

    2 - Capital Acquisitions Tax (CAT) is the only tax that will apply on an inheritance or a gift. Stamp Duty will apply on the gift of property or shares, but not inheritances.

    3 - It's hard to say what you will need to pay as your figures don't seem to add up, I doubt you got €2,000 for selling a house but perhaps this is €200,000? You will pay CGT on the difference between the value at inheritance (that you were assessed for CAT on) and the value you sold it for. Sometimes you will get people thinking they are being smart getting a low value on a house when inheriting it, only to then have a low base cost when selling the property and they actually may have been better off getting a higher valuation at inheritance and using more of the CAT thresholds available to them.

    4 - Ireland operates a self assessment system so to file the return and pay the tax you do not need to submit anything further. If you are selected for a Revenue audit or query you may then need to provide the documents around the sale, but initially you do not need to provide this.



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