CGT exceptions on property sale

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Chrisss

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Hi There

Looking for some clarity on CGT exceptions. Property purchased in Nov 2012 and main residence until Feb 2019. Can PPR relief be used in conjunction with 7 years exception when calculating CGT? If yes, how to calculate it? I can't find anything saying only one exception applies. What about the last 12 months relief?
Purchase price €160k
Purchase fees €2500
Sold for €270k in May '23
Selling fees €8k

I would appreciate your advice
 
There is no provision for the interaction of 4 - 7 year relief and any of the other reliefs that apply for capital gains tax purposes.

As the legislation provides two overlapping reliefs you should be in a position to avail of whichever one results in the lowest tax cost in my view.

The property has been owned for 10.5 years approx.

PPR relief will allow relief for 7.25yrs of the period of ownership (6.25yrs plus 12mths).

The 4/7 yr CGT relief (Section 604A) will allow relief for 7yrs of the period of ownership.

PPR relief seems to be the one to claim here as it results in a slight saving.
 
Thank you for your response. Anyone any other opinions on overlapping reliefs?
Just as an exercise I used an online calculator on auctioneera.ie/capital-gains-cgt-tax-calculator which includes both reliefs.
 
Chrisss said:
I used an online calculator on auctioneera.ie/capital-gains-cgt-tax-calculator which includes both reliefs.
Click to expand...

Don't base your tax calculation on the strength of that calculator. You are right to look for some backup/verification. I've given my view, but others may differ.

The source I mentioned above deals with your exact situation - a worked example of a property purchased in the qualifying period, held for more than 7 years, used as a PPR for the first few years, rented thereafter.

I'd be surprised if your particular scenario was specifically contemplated at the design stage of that calculator. It seems to apply the 7yr CGT relief first; then it applies PPR relief to the non exempt gain.

The text below the calculator refers users to a firm of accountants. Perhaps that firm created the calculator and can advise on your specific situation.
 
Sorry to rehash this thread, and I know I've asked similar questions before on another thread, but I have the same query. My previous accountant said go ahead, overlap and use the two reliefs as there is no where to say they can't interact. My new accountant (long story - previous one no longer working for family reasons) says they can't interact and we have to choose one.

In simple terms, bought in 2014, lived in until 2017, rented it out until end 2022 - 8 years ownership.
The s604 relief is 7 of the 8 years obviously.
But if I could use PPR relief, even just the last year of ownership, would that bring the liability to nothing?

Separately, on the calculator referred to above, there is no box for when you sold the property, so how does it calculate the total ownership period!?
 
longwexman said:
on the calculator referred to above, there is no box for when you sold the property, so how does it calculate the total ownership period!?
Click to expand...

Presumably it assumes that you sell at the current date.

As I mentioned above, be wary of that calculator. If you put in a very simple example of:

- a property purchased in Oct 2018 for €100k,
- occupied as a main residence for 4 years (48 mths),
- sold for €200k in Oct 2023 (total ownership period of 60 mths),

the calculator arrives at a taxable gain of €20k when there should be none.
 
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Hi, could anyone clarify if PPR relief can be used in conjunction with 7 years exception when calculating CGT? I am struggling to get a definitive answer from any resources I've tried. Thanks.
 
Hairymollies said:
Hi, could anyone clarify if PPR relief can be used in conjunction with 7 years exception when calculating CGT? I am struggling to get a definitive answer from any resources I've tried. Thanks.
Click to expand...
Maybe you could clarify/explain the sort of scenario that you're thinking of?
E.g.
  1. Property purchased 1st January 2014
  2. Property rented out from then until 31st December 2020
  3. Property then occupied as the owner's PPR
  4. Property sold December 2024
My understanding is that the period covered by 1/2 is exempt under the 7 year exemption rule:

Property acquired between 7 December 2011 and 31 December 2014

This page explains relief available for land or buildings acquired between 7 December 2011 and 31 December 2014
www.revenue.ie
And then the period covered by 3/4 is exempt under PPR exemption rules:

Principal Private Residence (PPR) Relief

This page outlines Principal Private Residence (PPR) Relief
www.revenue.ie
So any gain arising on disposal would be fully exempt from CGT.

But I'm open to correction on that.
 
Hi, it's a different scenario.
Purchased in June 2013. Lived in for 4 years to 2017 as ppr.
Non rental property. Sold in Aug 2024.
 
Did you have a different PPR from 2018 to 2024?
What happened with the property during that period?
Sounds like PPR relief and the 7 year rule should apply up to June 2020.
But I'm not sure about July 2020 to August 2024 without more info.
(Again, I'm open to correction on any of this. And if in doubt get professional advice.)
 
Thank you for your replies. I had a different PPR from 2018 onwards and i was still using the original property less of the time. My question really is....Can I use both ppr relief and 7 year rule relief in the cgt calculation for the 11 years of ownership. I have asked a revenue representative and a tax advisor but neither could answer yes/no. I cannot find any iterature which states you cannot use both reliefs in the calculation.
 
Hairymollies said:
I have asked a revenue representative and a tax advisor but neither could answer yes/no.
Click to expand...
I would have expected a professional tax advisor to be able to give a clear opinion on this. I think that you can use both categories of relief but I'm not a tax expert. Seems to me that you should be able to claim CGT relief under the 7 year category for 2013 to 2020 but I'm not sure about the period up to disposal in 2024 when it wasn't your PPR and isn't covered by the 7 year rule.

You probably need to ask another tax expert who can answer your questions.
 
The construction of the relieving provision in each of the respective sections (S604 and S604A) would suggest that there's no way that these reliefs can interlock / compound.

Both sections provide that "such portion of the gain shall not be a chargeable gain as represents..." (the relieved period as a proportion of the total period of ownership).

They are two separate sections of legislation without any cross reference to each other, and therefore the relief under each has to be computed in isolation, so in each case you first need to compute "the gain" - this is simply an arithmetic exercise.

"The gain" is then reduced by some fraction (depending on the facts of a particular case) to arrive at "the chargeable gain".

It's therefore necessary to calculate the relief and chargeable gain under each section, if both potentially apply, and whichever relief produces the lowest chargeable gain is the one that applies.
 
torblednam said:
The construction of the relieving provision in each of the respective sections (S604 and S604A) would suggest that there's no way that these reliefs can interlock / compound.
Click to expand...
This is what I find confusing.....it suggests, it does not state. When I ask if both reliefs can be applied together....the answers I recieve are generally opinions. Your answer above is the most factual so far but you say it suggests. Thanks for your reply.
 
That's how legislation operates, it's just words on a page and they often have to be interpreted in their context to be applied, as every possible situation cannot be explicitly covered.
 
torblednam said:
That's how legislation operates, it's just words on a page and they often have to be interpreted in their context to be applied, as every possible situation cannot be explicitly covered.
Click to expand...
Once again, thank you for the responses. Pot luck maybe.....the person reviewing the returns document may interpet it one way or another. If there are no direct rules to follow and only guidelines.
 
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