Cgt on former PPR

Like some our rental properties were our PPRs for 3 years each time. We are in the process of giving " notice to quit " on both properties and one will be available to sell later this year and the other spring 2023.

Both are cross charged and the bank is willing to be flexible in repaying the debt given the different timeliness each can be sold . Although that needs firming up in the detail.

If they sell at 80% of the market seems to think they are worth the debt will be cleared, but there will be a gain on both with the property selling next year probably having a gain of €170k, the other 20k at a push.

I fully understand the extra year of ownership of the PPR for CGT purposes.

The first sale house cost €410 , but was sold as " builders" finish, no painting, tilng, Kitchen, wardrobes, etc etc. And that expenditure came to 53k , we never claimed capital Allowances on any of this, as we thought the Downturn in 2008 was " temporary " ha, additionally I was sick then and survival was the main game in town.

My question is can the " Capital expenditure " particularly the first property be deducted from CGT calculation?

I have every receipt too. This house was PPR from 2005 to 2007, moved back to Maynooth in late 2007.

Any thoughts would be appreciated

Claims under CGT must be for allowable expenses - from https://www.revenue.ie/en/gains-gifts-and-inheritance/transfering-an-asset/how-to-calculate-cgt.aspx

They are costs that you can deduct from the sale price to work out your chargeable gain. These can be:

• any money spent by you which adds value to the asset (known as ‘enhancement expenditure’)
• costs (for example, fees paid by you to a solicitor or auctioneer) when you acquired and disposed of the asset

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Replacing a broken fridge, for example, would not be an enhancement expenditure but a new kitchen installation would be allowable

Just to expand on the last point, expenditure on capital allowances which are claimable against rental income in respect of furniture, fittings and contents are generally different from the sort of expenditure that is classed as enhancement expenditure for the purposes of CGT. Tiling, fitted kitchen, fitted wardrobes, internal doors, bathroom suites etc are unlikely to be eligible for capital allowances but should qualify as enhancement expenditure if they enhance the value of the property.

To answer the original posters question, having studied Revenue literature, I believe that you would put the "purchase price" effectively at 463k (cost price of €410 plus €53 k fit out).

The only way to be 100% certain is to consult revenue, but to my reading and knowledge of CGT calculations, the above is correct

PebbleBeach2020 said:

The only way to be 100% certain is to consult revenue,

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Revenue are not in the advice business, they're in the tax collection business, and have no duty of care to ensure that taxpayers aren't paying more tax than they necessarily should. Besides, they routinely disclaim their own guidance and advice whenever it suits them.

T McGibney said:

Revenue are not in the advice business, they're in the tax collection business, and have no duty of care to ensure that taxpayers aren't paying more tax than they necessarily should. Besides, they routinely disclaim their own guidance and advice whenever it suits them

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thanks for explaining what revenue do. If you have ever rung their customer service line, which I presume you haven't, you will learn that they have no problem giving advice, guidance, confirmation etc on questions you have. That's their job.

PebbleBeach2020 said:

thanks for explaining what revenue do. If you have ever rung their customer service line, which I presume you haven't, you will learn that they have no problem giving advice, guidance, confirmation etc on questions you have. That's their job.

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If I had a Euro for every time I’ve come across an instance of Revenue giving bogus guidance and advice, I’d be a wealthy individual.

Their job should be to collect precisely the correct amount of tax. However, many within its ranks believe that Revenue’s job is to collect as much tax as possible.

Those phonelines are also heavily populated with inexperienced bluffers in addition to the sinister zealots who want to collect as much tax as they can.

PebbleBeach2020 said:

thanks for explaining what revenue do. If you have ever rung their customer service line, which I presume you haven't, you will learn that they have no problem giving advice, guidance, confirmation etc on questions you have. That's their job.

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Wow. Just wow.

34 years working as an accountant, over 20 running my own practice. Maybe some day I will get to ring Revenue.

Calling Revenue for advice…

You’re playing a match at Old Trafford against Manchester United. One of the United defenders hacks your striker down in the United box. You think it’s a penalty.

Would you ask Alex Ferguson to make the decision?

Gordon Gekko said:

However, many within its ranks believe that Revenue’s job is to collect as much tax as possible.

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Exactly. Note that in Revenue annual reports, the key performance indicator most prominently highlighted is the amount of tax collected in the applicable year.

Board’s Review for 2021
2021 was a truly exceptional year for Revenue. Not only did we collect a record amount of tax and duty for the year, we did so against the backdrop of a fundamentally changed trading environment between Ireland and Great Britain and the continued significant economic and social disruptions associated with the Covid-19 pandemic. With the health and safety of our people always a priority, we delivered our core business while continuing to operate in a largely remote working environment. In a relatively short timeframe, following the enactment of legislation that updated, after seven years, the operation of the Local Property Tax (LPT), we put all the necessary measures in place to effectively administer the changes in advance of the new valuation period which began on 1 November last. We also continued to play a significant role in the delivery of key Government supports to businesses as part of the national response to the Covid-19 pandemic.
Revenue collected total gross receipts of €96.6 billion, including €17.5 billion in non-Exchequer receipts collected on behalf of other Government Departments and Agencies. Net Exchequer receipts after repayments were €67.5 billion, an increase of 20% or €11.3 billion on 2020.

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My posting was delighted. Apparently sarcasm and ridicule from others is permitted. I was warned that tommybabd Gordon are in the tax business. Well I have many friends in revenue commissioners and know well the service they provide. I stated that you can ring their customer service and they are knowledgeable and helpful. Saying that needed to be deleted yet smart comments about asking alex Ferguson (he retired 8 years ago for your information) was akin to ringing revenue.

PebbleBeach2020 said:

My posting was delighted. Apparently sarcasm and ridicule from others is permitted. I was warned that tommybabd Gordon are in the tax business. Well I have many friends in revenue commissioners and know well the service they provide. I stated that you can ring their customer service and they are knowledgeable and helpful. Saying that needed to be deleted yet smart comments about asking alex Ferguson (he retired 8 years ago for your information) was akin to ringing revenue.

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You claimed "the only way to be 100% certain is to consult revenue". This was patently false, for the reasons Gordon and I stated. Of course you (or anyone) can ring Revenue customer service and speak to someone knowledgeable and helpful, none of us are disputing that. But if they get it wrong, and nowhere do Revenue claim that the advice and guidance they give is 100% guaranteed to be correct, the consequences are on you.

PebbleBeach2020 said:

My posting was delighted. Apparently sarcasm and ridicule from others is permitted. I was warned that tommybabd Gordon are in the tax business. Well I have many friends in revenue commissioners and know well the service they provide. I stated that you can ring their customer service and they are knowledgeable and helpful. Saying that needed to be deleted yet smart comments about asking alex Ferguson (he retired 8 years ago for your information) was akin to ringing revenue.

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I’m glad your posting was delighted.

Mine was delirious.