Capital Gains Tax

[fishes1967]

I have recently sold a property after owning it for 8 years.

It was my Principal Private Residence for 5 years. Then I bought a new house (PPR) and rented the original out for the next 3 years.

Is CGT payable on only 3/8ths of the gain (after deductions, etc)?

Thanks in advance, F

 

[ClubMan]

More likely 2/8ths since the 12 months after vacating it as your PPR should be exempt from CGT. Get independent, professional advice if in doubt.

 

[ubiquitous]

the 12 months after vacating it as your PPR should be exempt from CGT.

There is no such exemption in the CGT code. However the final 12 months of ownership is concessionally treated as exempt in certain circumstances, and it is likely given the facts outlined above that the OP can qualify for this concession. However professional advice is recommended.

 

[ClubMan]

There is no such exemption in the CGT code. However the final 12 months of ownership is concessionally treated as exempt

Eh?

However professional advice is recommended.

Yeah - as I said.

 

[ubiquitous]

Eh?

Just to clarify, the 12 months after vacating a property as one's PPR is not exempt from CGT unless the individual sells it within that period. As I said there is a separate exemption where the final 12 months of ownership is concessionally treated as exempt in certain circumstances. There is a subtle difference.

 

[fishes1967]

Thanks for your help.

As I said there is a separate exemption where the final 12 months of ownership is concessionally treated as exempt in certain circumstances

Do you know what these circumstances are or where I could find them?

Thanks again
F

 

[millhouse]

The last 12 months exemption was introduced by Revenue to help people who rented/ bought a new house but have failed to sell their previous PPR. The only condition required is that a some stage the old house was your PPR.
Contrary to ubiquitous posting above it is not a condition that the house
be sold within 12 months my understanding is that even if it takes you two years to sell you will still get the exempetion.

Revenue booklet CGT1 has info on it.

 

[ubiquitous]

Contrary to ubiquitous posting above it is not a condition that the house be sold within 12 months

Er, I don't think I actually said that. Anyway, thanks for clarifying this point.

my understanding is that even if it takes you two years to sell you will still get the exempetion.

Yes, but if the property is not the owner's PPR for the full 2 year period, the exemption will only apply to the final 12 months of ownership meaning that the previous 12 months of non-occupation will generate a CGT liability.

As you can see from the above, the rules are rather subtle and can be difficult to explain properly on a forum such as this. If anyone is confused or thinks they may have a liability, they should get professional advice.