CGT on former PPR (now rented)

T

thos

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Hi all,
I bought an apartment in 2006 for 385k, lived in it for 8yrs before building a new PPR and then rented out the apartment. As a rental/non-PPR property, I understand I would be liable for CGT if I were to sell it but that there would be relief for the 8yrs I lived in it as my PPR, so how do I work that out? I’m interesting to understand the calculation so I can factor into either current or future decision.

After being in negative equity, the place is now at break even with mortgage of 275 and approx market value of 275. I am hoping to keep it for the long term and hopefully sell at a future date, so would like to be aware of how this would be calculated in the future. However, I’ve also got some shares doing well, and interested to see if taking a 100k loss at this point would help me offset share gain, or whether this PPR relief also works in reverse (ie limited loss to recognize)

Any advice greatly welcomed.

Thanks,
Tom
 
You are more or less spot on. If you make a gain, you’re entitled to PPR Relief in proportion to the period of time the property was your home. Plus there’s a bonus 12 month period of deemed occupation.

However, as you’ve indicated, it also works in reverse and restricts a loss.

If you lived there for 8 years, 9 is the numerator and your total period of ownership is the denominator in the formula. So after (say) 20 years of ownership, 9/20ths of any gain is sheltered or 9/20ths of any loss is restricted.

€275k is obviously only “break-even” in terms of the positive/negative equity piece; you’ve a long way to go to get back to your base cost for CGT purposes which is the €385k plus acquisition/disposal/enhancement costs.
 
Sorry to jump onto your post but am curious. Do you need receipts for the acquisition/disposal/enhancement costs?
 
clueless said:
Sorry to jump onto your post but am curious. Do you need receipts for the acquisition/disposal/enhancement costs?
Click to expand...

Yes, but it’s a self-assessment system so in the absence of a receipt, a taxpayer should not by shy about including something that is reasonable. For example, if I knew I’d paid legal fees in relation to the purchase but couldn’t find or obtain a copy of the fee note, I’d include 1%.
 
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