Capital Gains Tax Calculation

[Tommyh]

Hello All

I am trying to get a rough calculation of CGT, but struggling, any help would be most welcome, apologies for any errors, Happy to furnish further details

Non Resident (Living In Australia), Rental proceeds declared in Australia, No outstanding Mortgage

House purchased in Dublin March 1991 for Euro 58.400 (46.000 punts €1 = IR £0.787564)

It was my PPR until Oct 2008 (200 months)

Rented since then until May 2018

Intending to sell for Euro 350,000 2020 (Estimated)

House improvements during 2018 approx Euro 15,000 (New Bathroom, Robes, Kitchen, Heating)

Currently rented for 6 month until Dec 2019

Sale 350.000

Cost of sale 7000

Net 343.000

Thank you, Best regards

 

[jpd]

Sale price	€ 350,00​
Cost of sale	€ -7000​
Net proceeds (1)	€ 343,000​
Upgrade costs not necessarily allowed as they might not meet criteria for capital expenditure and be classed as repairs or maintenance. I have disregarded them in the calculation of costs
Purchase price March 1991	€ 58,400​
Indexation relief multiplier	1.442​
Indexed purchase price (2)	€ 84,213​
Net gain (1) - (2)	€ 258,787​
Length of ownership - March 1991 to March 2020	29 years or 348 months
Length of PPR	200 months
Additonal 12 months	212 months
PPR relief	212 / 348 = 61% x € 258,787 = € 157,860
Taxable gain	€ 100,927​
less annual relief	€ - 1,270​
net taxable gain	€ 99,657​
Tax @ 33%	€ 32,886​

 

[torblednam]

Good work by JPD there +1 to all that...

Just one point about the rental proceeds - you say in the OP they’re declared in Australia. Are you also declaring them here, because you’re obliged to, and you’re then entitled to credit in Australia for the tax paid here... maybe this is what you’ve been doing, but it’s a distinct possibility that the sale of the property could precipitate your status as a LL coming to Revenue’s attention...

 

[elcato]

What about costs when buying ? Are they allowable ? Stamp Duty was high then also.

 

[Tommyh]

Excellent work jpd, indeed much appreciated, thank you for taking the time, To answer torblednam's question, No i have not declared proceeds in Ireland on advise from Australian tax agent, will certainly look in to this further for clarification, thank you.

 

[jpd]

From the Double Taxation Treaty between Ireland and Australia

Article 7
Income from Real property
1. Income from real property may be taxed in the Contracting State in which the real property is situated.

Rental income is taxable in Ireland if the property is in Ireland - any Irish tax can be offset against Australian tax due on the rental income

So you have a problem in that you missed out declaring income for last 10 or so years. Also you should have registered with the PRTB …..

 

[Oisin19]

Excellent work jpd, indeed much appreciated, thank you for taking the time, To answer torblednam's question, No i have not declared proceeds in Ireland on advise from Australian tax agent, will certainly look in to this further for clarification, thank you.

Id be going back to the advise given by the Auz advisor and see can you get some remedy for the potential tax liability and interest that you now owe to Irish revenue.

 

[Tommyh]

What about costs when buying ? Are they allowable ? Stamp Duty was high then also.

My understanding is that prior to Dec 2010 there was zero tuy on property valued less than Euro 125.000, I may be wrong though.

Sale price	€ 350,00​
Cost of sale	€ -7000​
Net proceeds (1)	€ 343,000​
Upgrade costs not necessarily allowed as they might not meet criteria for capital expenditure and be classed as repairs or maintenance. I have disregarded them in the calculation of costs
Purchase price March 1991	€ 58,400​
Indexation relief multiplier	1.442​
Indexed purchase price (2)	€ 84,213​
Net gain (1) - (2)	€ 258,787​
Length of ownership - March 1991 to March 2020	29 years or 348 months
Length of PPR	200 months
Additonal 12 months	212 months
PPR relief	212 / 348 = 61% x € 258,787 = € 157,860
Taxable gain	€ 100,927​
less annual relief	€ - 1,270​
net taxable gain	€ 99,657​
Tax @ 33%	€ 32,886​