CGT Calculation - is my calculation correct? Clarification re Partial PPR

[jim]

Hi, Can I please sense check the following approximate CGT calculation. Am I overlooking anything?

My question is mainly regarding period of ownership:
Lived in house June '16 to Nov '17 (29 months)
Owned house for 45 months

so 29+12/45 =PPR Relief?

Sale Price		300,000	Jun-16
Purch Price		- 215,000	Mar-20
PROFIT		85,000
LESS:
Enhancement? NEW PLUMBING		- 1,000	added new pipes and water tank
Solicitor cost when purchasing		- 5,524	incl stamp duty and VAT on solic fees?
Solicitor cost when selling		- 1,600	includes VAT?
Estate Agent when selling		- 3,630	includes VAT?
engineer fees when purchased		- 363	includes VAT?
CHARGEABLE GAIN		72,883
Less Personal Exemption		- 1,270
Partial PPR relief		- 46,969	lived in house from June 2016 to Nov 2017 (17 mnths plus final 12 = 29 mnths/ 45 mnths total ownership)
TAXABLE Gain	24,644

Tax @ 33% 8,133

 

[Mrs Vimes]

Partial PPR relief comes off before the personal exemption €1270.
You do include stamp duty and VAT on professional fees as deductions.
Ensure that you are correctly classifying the plumbing work as being enhancement as opposed to maintenance.
I assume you have mixed up the dates for purchase and sale and don't have a time machine!

 

[Feemar5]

Was your house rented or did you have to move for work - it makes a difference . If it was rented then 29 months seems correct. I don’t think pipe work can be claimed- it needs to be something added or a big improvement i .e new kitchen or bathroom.

 

[jim]

@freemar

It was rented.

The addition of new pipes and water tank is a grey area based on my read of the revenue guidance...for it to be enhancement expend it needs to have added value. Thats basically all it says. And so id consider this to have added value. Whats the consequence of me treating it as enhance expend but the revenue then disagree....its only 1k so it would have a minimal impact on the tax liability even if interest and penalties are added.

@Mrs Vimes
Yes that was a mistake re dates, should be other way around. Im surprised that stamp duty is deductable but it does appear to be, from revenue.ie.

Partial ppr before personal exempt - what diff does it make to tax liability? Theyre both deducted from chargeable gain in arriving at taxable gain, no?

Thanks both.

Is there anything else i can deduct or consider that might reduce my bill? I think i have covered all bases though in my calc.

 

[Mrs Vimes]

Was your house rented or did you have to move for work - it makes a difference . If it was rented then 29 months seems correct. I don’t think pipe work can be claimed- it needs to be something added or a big improvement i .e new kitchen or bathroom.

If you're referring to the absence due to employer requirement being treated as PPR, you have to live in the house before and after the absence. Also, it doesn't matter if it was rented during the absence.

 

[Mrs Vimes]

@freemar

It was rented.

The addition of new pipes and water tank is a grey area based on my read of the revenue guidance...for it to be enhancement expend it needs to have added value. Thats basically all it says. And so id consider this to have added value. Whats the consequence of me treating it as enhance expend but the revenue then disagree....its only 1k so it would have a minimal impact on the tax liability even if interest and penalties are added.

It's self-assessed so it's unlikely Revenue will actually ask for a breakdown of the expenditure and then argue about whether it should have been allowed but the flip side is that you could be liable to interest and penalties if they do check and then disagree.

Yes that was a mistake re dates, should be other way around. Im surprised that stamp duty is deductable but it does appear to be, from revenue.ie.

Partial ppr before personal exempt - what diff does it make to tax liability? Theyre both deducted from chargeable gain in arriving at taxable gain, no?

Thanks both.

Is there anything else i can deduct or consider that might reduce my bill? I think i have covered all bases though in my calc.

Sorry, I had thought that you reduced the total gain by 1270 before calculating 29/45. It makes no difference to your calculations above.