Capital gains liability buying new PPR, then selling old.

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Bumper22

Registered User
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Hi,

My Father has lived in his home for 50 years which is mortgage free. He wants to move and has identified a new home which he wants to buy for cash. If this works out, he will then own a new PPR and will proceed to put his old PPR on the market.

He owns no other properties.

My question is, could he be liable for capital gains when his old PPR sells ? This may take quite some time, even a few years. Any suggestions on how to minimise CGT also welcome.
 
PPR will exempt the final 12 months of ownership after that each year 1/50 of the gain will be taxable.
 
Also, don't forget that the first €1,270 of taxable gains in a tax year are exempt from CGT.

In the most simple cases, an asset owned as a PPR for 8 years and then sold after 2 years of non-PPR status with a gain of €20,000, would be classed as exempt from CGT for the first 8 years and the final 1 year - meaning €2,000 (10%) would be liable for CGT. In this case, CGT would be due on €730 after using your annual allowance giving a total tax of €733 * 33% = €241.89.

However, in your case, I believe Indexation may come into play - which would reduce your liability further. Others will be able to confirm or deny this as I am by no means an expert.
 
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