CGT following death of spouse

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drunat

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hi. Slightly complicated situation. My late husband bought an apartment as an investment property in 2002 (we married in 2005). The apartment has been rented all the time.
In 2012 my husband has been diagnosed with terminal cancer. On solicitors advise and to reduce potential probate complications, my name was added to the deeds in 2012 (or 2013 can't remember exact).
In April 2014 my husband sadly passed away leaving me with 2 young kids.
In 2017 I decided to sell the apartment as I found it stressful to manage it from the distance (its in a different city). I sold it and now trying to figure out CGT implications.
For illustration purposes the following applies:
Purchase price in 2002: 180k
Relevant expenditure, stamp duty, fees: 20k
Sale price 2017: 190k

If say, my husband was alive and sold it, its all fairly straightforward - he would have made a loss of 10k on this. However am I right in thinking that I now have to calculate CGT based on the value of the apartment at the time of my husband's death? let's say the value in 2014 was 180k (same as at time of purchase), but does this now mean that I can not use the relevant expense to offset the capital appreciation?
Can someone explain it to me how it works or point me in the right direction? I can't find anything on revenue site that applies tony situation.
How can I minimise CGT? would prefer to make a loss that could offset my future gains.
Thank you
 
I am sorry for your loss.

Your base cost for the 50% your husband gifted to you is 50% of his original base cost, i.e. €100k.

Your base cost for the other 50% is 50% of its value when you inherited it, which presumably was less than its value in 2017. Say it was €80k based on a €160k valuation.

Your base cost would then be €180k, and you'd have to look at your own selling costs in 2017, but you'd be looking at a small capital gain or no gain/no loss depending on the disposal costs.
 
Doesn't this depend on how the OPs name was added to the deeds. If it was as a joint tenant then I would agree with Gordon, however if it was as a tenant in common, which I think is more likely, then the base cost would be the husbands original acquisition cost.

I think you need professional advice.
 
that's very helpful - thank you Gordon. Can I check how am I supposed to figure our the value of the apartment in 2014 - no formal valuation was den at the time. Do we have to use Residential property price index or can I refer to similar properties on Price Register? Price registrar prices seem closer to my sale price than RPPI would suggest.
 
cremeegg said:
Doesn't this depend on how the OPs name was added to the deeds. If it was as a joint tenant then I would agree with Gordon, however if it was as a tenant in common, which I think is more likely, then the base cost would be the husbands original acquisition cost.

I think you need professional advice.
Click to expand...

I think you mean that the other way around.
 
Oh dear! what is the difference Joint tenant vs tenant in common? Do I have to ask solicitor? I was just told my name was added to the deeds i.e. we were joint owners. I inherited all husbands assets.
 
OK I read up on this a little and I am pretty sure I was added to the deeds as Joint ownership i.e. my husband's interest automatically transferred to me on his death. I think that was the whole point of is. I am checking with the solicitor but for the purposes of this discussion we can assume its Joint tenant. So what is the situation here. Does 50:50 split still apply or does the original cost of acquisition apply here?
 
I don't mean to alarm you, but if that's the case, you may have CGT to pay.

As I understand it, the gift into joint tenancy constituted a full disposal and reacquisition at the prevailing market value. That would have been much lower, say €130k. So you acquired 50% at (say) €65k. You then acquired the other 50% on the death of your husband, so let's assume the value was €150k at that time. Your base cost would be €140k. Then you sell it for €190k, and have to pay CGT on €50k.

The caveat is that it's a while since I looked at this stuff, so I could be wrong, but if I'm right I would give strong consideration to going after your solicitor for what may have been bad advice. It all depends on the valuations at the various points.
 
Oh my.. I hope you are wrong.. I am checking with the solicitor but I don't think he was thinking about tax implications and house values at the time when he gave us advise. His main concern was to ensure we wouldn't have to go through probate in the event of my husband's death as all of assets would be transferred in joint names.
 
Gordon Gekko said:
I don't mean to alarm you, but if that's the case, you may have CGT to pay.

As I understand it, the gift into joint tenancy constituted a full disposal and reacquisition at the prevailing market value. That would have been much lower, say €130k. So you acquired 50% at (say) €65k. You then acquired the other 50% on the death of your husband, so let's assume the value was €150k at that time. Your base cost would be €140k. Then you sell it for €190k, and have to pay CGT on €50k.

The caveat is that it's a while since I looked at this stuff, so I could be wrong, but if I'm right I would give strong consideration to going after your solicitor for what may have been bad advice. It all depends on the valuations at the various points.
Click to expand...
Gordon, I think you might be wrong. Here is what I found on revenue site:
"In general, transfers of assets between spouses or civil partners living together in a year of assessment are not treated as disposals for Capital Gains Tax purposes. Instead, the spouse or civil partner receiving the asset is treated as having acquired it at the same time and for the same consideration as the transferring spouse or civil partner originally acquired it. " from here: [broken link removed]
 
Thank you I'll check with my solicitor first and go from there. I am clearer now but will read up on joint tenancy further
 
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