Is CGT calculated from time of death or time of disposal?

House prices have been rising in the Dublin area. Is CGT calculated on the value of the deceased person's house at the time of death or at the time of disposal. There was a 6 month gap between the date of death and the disposal of the house during which time the house increased in value?.
For probate purposes the house was valued at €x but achieved circa €60k over this figure. What figure is entered for CGT purposes?

The beneficiaries of the estate acquire the property on date of death. If the value of the property rises between date of death and date of sale, then the beneficiaries have a capital gain.

Thanks Dr. Debt. Can I give an example of figures as I don't fully understand it. Let's say at time of death the house was valued at €700k. Then six months later it is sold for €750k. It was submitted to probate as having a value of €700k.
Let's say there was one beneficiary. Inheritance tax has to be paid, after allowances of €225k on the balance €525k. Is there a further CGT tax on top of this because the house sold for €50k over the price submitted to probate?
Or is there just the one tax to be paid on the difference between the tax free inheritance threshold of €225k and the sale price of €750k?

Kimmagegirl, when you say the house was disposed of who disposed of it and to whom?

If the executor disposed of it and gave the net proceeds of the sale to the beneficiary, then the estate has CGT.

If you mean that the executor disposed of it to the beneficiary and it has not yet been sold onto a third party, then there is no CGT.

If the house was transferred to the beneficiary and subsequently sold by them for €50k more than the value on the date of the death, then yes, CGT applies in addition to the CAT.

Yes based on the example you gave, CAT (capital aquisitions tax) is payable based on the probate value of 700K.

In addition to the CAT you need to pay capital gains tax based on the gain you made between the probate valuation (700K) and the eventual sale price (750K)

Thanks that clarifies the situation. I see that both are charged at 33% excluding the threshold available for CAT. Are there any reliefs available for either tax other than the threshold allowance?

In the above example, is the calculation of CGT not based upon the difference between the sale price and value at date of death of the disponer? (as opposed to probate value because of CGT rules). There could be an additional CGT liability because of rising house prices.

In the case where during the administration of an estate a house is sold, CGT is payable by the estate on the difference between the sale price and value at date of death. The net proceeds (Sale price less CGT) are paid to the beneficiaries and CAT is payable on the net amount. It is an effective double hit of tax - the gain in value during the administration period will be part taxed twice because of CGT rules (date of death used value used as base cost). Can anyone shed any further light on this?

As mentioned earlier it's important to understand who is disposing of the asset.

The valuation date for CAT purposes is the date that the beneficiary become entitled to the property.

So if the value is €750k on the valuation date they pay CAT on that.

If the asset is sold before the beneficiary is entitled to it then the estate has to pay €16,500 in CGT and gives €733,500 to the beneficiary and they pay CAT on that.

So in an era of rising prices it may not be best to have the estate dispose of the property. Remember the CGT has been avoided on the increase in the original value Date of death.

Rather than start another thread, I have a similar question if anybody can help me on please?

My aunt passed away in 2008, estate valued at x amount then. Her husband had the lifetime interest and passed last year. Home, etc sold.

Can I use thresholds for 2008 or is it from 2013? Can't get clear picture from Revenue site. Any advice would be greatly appreciated before I fill out returns.

MacMun said:

Rather than start another thread, I have a similar question if anybody can help me on please?

My aunt passed away in 2008, estate valued at x amount then. Her husband had the lifetime interest and passed last year. Home, etc sold.

Can I use thresholds for 2008 or is it from 2013? Can't get clear picture from Revenue site. Any advice would be greatly appreciated before I fill out returns.

Click to expand...

What happened in 2008?
Who got left what?
Why did husband only get a lifetime interest? who owned the house at that point?
What happened in 2013?
Who got left what?

She passed away 2008, no children, only husband. It was her house, he had other property which was in his own name. He was willed life time interest only and on his death her property to be sold and monies distributed of which I am a beneficiary.

2013 my aunts property auctioned and monies distributed. I am due to pay the tax and I need to know if I use 2008 threshold or 2013. Don't want to over pay the Revenue

Beyond my pay-grade However the clearer explanation should get you an answer here

AFAIK... the valuation date will be linked to the death of the person with the life interest (2013). This is when you became beneficially entitled to the property and this will trigger the tax liability. Whether the threshold and the rate of tax attach to the original date of the death of your aunt is the key point - the amounts involved could be huge given the difference in thresholds (521k to 225k) and tax rates (20 to 33%). I'd seek professional advice if I were in your shoes.