Capital Gains before Loss.

J

jcount

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I am currently selling my home. I would expect to make a Capital Loss on this property of about 60-70K. The property has been on sale now for over 12 months.

I am also in a position where I own some shares which have done very well. I am currently sitting on a capital gain of about 60K. I am think of selling these shares soon.

I know it is possible to write off capital gains against capital loss. However, I am wondering what happens in the case where the gain is made before the loss. I have no idea when this property will sell (it may not be this year or next).
 
You only make the gain on the date you sell the shares. You can't carry gains forward to another tax year but can "carry" it within the same tax year e.g. you could sell the shares now and, so long as your capital loss crystallised in 2010, you could offset the loss against the gain. If you sell the shares in 2010, you cannot carry that gain or offset it if you sell the house in 2011.

Have a look at the revenue site (or this, on CGT specifically, although I haven't read through it) for more info.

Now, having said all of that, if the house is your PPR (you refer to it as your "home" which implies that it may be your PPR), then there is no loss claimable. CGT isn't payable on the sale of one's PPR and so a capital loss isn't claimable/offsettable either.
 
yes this is our PPR. I did not realise a loss here could not be offset. Thanks very much for this info.

So what would happen in a case where we move out of this property and rent another. This maybe something we will need to consider soon if the property does not sell.
 
Your time in the PPR + 12 months is treated as occupation so you would have to sell it more than a year after you moved out and rented in order to offset any loss. Then you would pro-rate the loss depending on how long it was an investment property vs PPR. There are numerous threads on this if you do a search.

For example, if you owned the property for 5 years as of today, moved out now and sold in two years time, then you could claim 1/7th of the loss against your gain. The loss/gain calculation is done on a straight-line basis.
 
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