Retirement Relief Question

B

Brenno123

Registered User
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94
hi
hope someone can advise me ( i am an accountant looking for a second opinion)

friend of mine sold a small building he used for his trade in april this year. consideration was 38k. I worked out CGT liability of 6.8k.

Just wanted to see if he might qualify for retirement relief on the asset and have no tax to pay. I dont think so but just want some second opinions.

he is 78 years old but he stopped working at 65 and the building hasnt been used since then, it has been vacant. I know a qualifying asset for retirement relief is as follows:

"The individual’s chargeable business assets (defined below) which he/she has owned for at least 10 years ending on the date of the disposal and which have been his or her chargeable business assets throughout that 10 year period. "

-A chargeable business asset being an asset used for the purposes of the trade

Does the fact that the building has been lying idle for the past 13 years rule him out of retirement relief? It was used solely for his trade for the 13years prior to it being idle.

Hope someone can help

Thanks
Bren





 
I see where you're coming from. I know that there is a provision to allow land that is rented following retirement to qualify for RR for 15 years but I think it's specific to land.

As far as I know the asset in this case would not qualify for RR.
 
No dice - the legislation is pretty clear:

""chargeable business asset" means an asset ... which is ... an asset used for the purposes of farming, or a trade, profession, office or employment, carried on..."

All present tense - has to be an asset that is in use, in a trade that is being carried on, throughout the ten years ending on the disposal.
 
Brenno123 said:
friend of mine sold a small building he used for his trade in april this year. consideration was 38k. I worked out CGT liability of 6.8k.
Click to expand...

That liability looks very high, in the context of the sale consideration. If pre-2003 indexation etc was applied correctly, the base cost of the asset must have been tiny. Was this actually the case in reality? It may be worth your while getting a proper second opinion in case something important has been missed.
 
thanks guys..i figured as much there is no way out of it.
T, the building (shed almost) was bought in 1987 for 4000 punts = €5079. indexed value = (5079x1.583=8040)
CGT = 38000-8040-2409(Solicitors fees)-2800(auctioneer fee) = 24751
x33%
8168
(1270)
6898

its big alright but can't see any other way out. feel sorry for the guy
 
The 1270 comes off the gain, not the tax.

24751
(1270)
23481
x33%
7748.73

even worse than you thought.
 
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