CGT nd inheitance tax

T

Total novice

Guest
Need clairification.

My aunt died last year leaving all her estate to my sister and myself. We were left some money on deposit and her home which is a small cottage. Her solicitor is the executor. We know we are liable for inheritance tax and we had the house valued for this. Our solicitor said he had some advise saying we were only liable for inheritance not CGT as the revenue take the larger sum. We sold the house and made only 18,000 euro profit as it needs rebuilding and modernisation. We are still waiting to get our cash as the solicitor now thinks we have to pay both and he is very slow. The purchaser is now in the house a month!! and we still have no cash. We spent 2,500 tarting up the house to intice buyers is this amount alowable against any CGT we have to pay??


Thanks
 
Revenue officials

I was Executor of my father's estate a few years ago, it was a very complicated situation with a trust involved etc. My Solicitor was less than useless so I ended up doing it all myself with the help of the revenue officials in CGT or Inheritance, if you get them on your side they really are very helpful, maybe give them a call on it?
 
Re: Revenue officials

There seem to be two separate issues here (a) capital acquisitions tax on the inheritance and (b) CGT on the subsequent sale of the property. Perhaps might assist with (a). In relation to (b) the Revenue [broken link removed] and [broken link removed] should help.

We spent 2,500 tarting up the house to intice buyers is this amount alowable against any CGT we have to pay??

It should be possible to offset such expenditure as an allowable acquisition/enhancement cost against any gain arising.
 
Re: Revenue officials

1) You will be liable to Capital Acquisitions Tax as normal on the inheritance you received from your Aunt.

2) You and your sister will be liable for Capital Gains Tax on any increase in value in the property between the time you acquired it ( deemed to be the date of death) and the date you sold it. You should be able to reduce the sales proceeds by the amount spent in getting ready for sale.

I think I know where your solicitor made the initial mistake. He was confusing it with a gift. If your Aunt gave you a gift while she was still alive, the gift would be treated as a disposal and she would be subject to Capital Gains Tax. You would be subject to CAT on the gift, but you would get a full credit for any CGT which she paid. This is because they arose from the same transaction. In your actual case there are two quite separate transactions - the inheritance and the sale one year later.

Brendan
 
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