I was in the restaurant business for a number of years from 1999 to 2006 (soletrader). I built a small restaurant / coffee shop on my own land in 1999. I ceased trading in 2006 and de-registered with Revenue for VAT etc.
I put the restaurant on the market in 2008 and am now in discussions with an interested party.
I understand from revenue.ie that I may have to pay Capital Gains tax on the sale of the restaurant. I propose to take professional advice on the matter but would like to get some understanding of whats involved in advance.
The following are the details:
Build the restaurant in 1999 at a cost of €120,000. I got a capital grant of €40,000 towards the building cost. I extended the building in 2003 at a cost of €70,000. I also installed a new kitchen at a further cost of €40,000 and bought new furnishings etc at a cost of €20,000.
My questions please:
Will the sale of the restaurant be subject to Capital Gains Tax?
If so, is the cost for the gain based on the original costs+ enhancements at the dates on which they were incurred or is the gain based on Net Book values at cessation date?
Can the cost of the new kitchen and new furnishings be included in the calculation of the gain?
The following is my attempt at a CGT calculation:
Sale price (estimate) 280,000
Less Disposal Costs (est) 2,000
Net Proceeds 278,000
Cost
Building Cost in 1999 120,000
Less Capital Grant -40,000
Net Cost 80,000 index 1.193 95,440
Extension in 2003 70,000
Kitchen Equipment 40,000
Furnishings 20,000
Total allowable cost 225,440
Chargeable Gain 52,560
I would really appreciate any advice / comments on the above
I put the restaurant on the market in 2008 and am now in discussions with an interested party.
I understand from revenue.ie that I may have to pay Capital Gains tax on the sale of the restaurant. I propose to take professional advice on the matter but would like to get some understanding of whats involved in advance.
The following are the details:
Build the restaurant in 1999 at a cost of €120,000. I got a capital grant of €40,000 towards the building cost. I extended the building in 2003 at a cost of €70,000. I also installed a new kitchen at a further cost of €40,000 and bought new furnishings etc at a cost of €20,000.
My questions please:
Will the sale of the restaurant be subject to Capital Gains Tax?
If so, is the cost for the gain based on the original costs+ enhancements at the dates on which they were incurred or is the gain based on Net Book values at cessation date?
Can the cost of the new kitchen and new furnishings be included in the calculation of the gain?
The following is my attempt at a CGT calculation:
Sale price (estimate) 280,000
Less Disposal Costs (est) 2,000
Net Proceeds 278,000
Cost
Building Cost in 1999 120,000
Less Capital Grant -40,000
Net Cost 80,000 index 1.193 95,440
Extension in 2003 70,000
Kitchen Equipment 40,000
Furnishings 20,000
Total allowable cost 225,440
Chargeable Gain 52,560
I would really appreciate any advice / comments on the above