Capital Gains Tax

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jackswift

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My friend wants to sell their house as they inherited another house and are going to live there. They have their mortgage almost paid. Their house cost 50k punts in the early 90's and they now hope to get 170k Euro for it. They will be building an extension onto the inherited house which will cost around 70k. They want to know could they be liable for CGT on the sale of their house?
 
Provided they lived in the house they are selling for all of their period of ownership then they won't be liable to any CGT on the gain as they will qualify for Principal Private Residence relief.
 
Thanks for the information. Yes they have lived in the house they are selling since it was built.
 
Nige said:
Provided they lived in the house they are selling for all of their period of ownership then they won't be liable to any CGT on the gain as they will qualify for Principal Private Residence relief.
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Provided, of course, they sell the house within 12 months of moving out (the last 12 months of ownership is deemed occupied).

If it's not sold within a 12 months then they could be liable to CGT on the part of the gains attributable to the period starting 12 months after they move out and ending when the house is sold.

Eg if they owned the house for 20 years and moved out after year 19 then no CGT should arise (19 years actual occupancy plus 1 year deemed occupancy = 20 years total occupancy).

But if they moved out in year 18 then they'd pay CGT on 1/20th of the overall gain.

Obviously the longer it takes to sell the property the bigger the portion of the gain will become chargeable to CGT.
 
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