CGT on PPR

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CGTQuestion

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Hey all, we recently submitted a Cg1 form for a property that was our principal residence, so it was except from capital gains. But we got a letter saying that we're due tax on the full gains. Has anyone experienced this? We're trying to get this sorted so we don't pay tax. Would appreciate to know your experiences.
 
Why did you submit a CGT 1 form if it was exempt?

Was it your PPR for the whole time you owned it?

You may need someone who knows a little bit of tax to help you out on this as it looks as if you made some mistakes on your return and will need to fix them.
 
Brendan Burgess said:
Why did you submit a CGT 1 form if it was exempt?
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Indeed.

Principal Private Residence - CG1 Form Claiming Full Relief

Hi, I am looking for help with filling in a CG1 form and claiming full Principal Private Residence Relief, as I lived in the house the entire time before it was sold. I bought the house in February 2019 - €295k - Legal Fees & Stamp duty €5,820 I sold the house in July 2024 - €441k - Legal &...
www.askaboutmoney.com
Sounds very similar to what happened here:

Principal Private Residence - CG1 Form Claiming Full Relief

Hi, I am looking for help with filling in a CG1 form and claiming full Principal Private Residence Relief, as I lived in the house the entire time before it was sold. I bought the house in February 2019 - €295k - Legal Fees & Stamp duty €5,820 I sold the house in July 2024 - €441k - Legal &...
www.askaboutmoney.com
 
By coincidence I met someone tonight who recently sold their home and as part of the legal work had to get a CGT exemption certificate.

Is this what you mean?

They messed up on the cert and ended up with an assessment which took them quite a while to sort out while the buyers of the house were issuing 28 days' notice to close.

I suggested that their solicitor should have dealt with it and apparently their solicitor said that he did not like dealing with Revenue.
 
The original poster said that they did a CG1 CGT return. The CGT Clearance Certificate process seems to be something completely different and doesn't seem to involve doing a CG1 return?
Brendan Burgess said:
I suggested that their solicitor should have dealt with it and apparently their solicitor said that he did not like dealing with Revenue.
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I'm don't think that solicitors are generally tax experts. My own certainly didn't get involved in tax issues related to conveyancing other than to ensure that LPT was paid up and LPT clearance obtained. They weren't able to advise on CGT issues other than to point out that they may need to be dealt with.
 
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Brendan Burgess said:
I suggested that their solicitor should have dealt with it and apparently their solicitor said that he did not like dealing with Revenue
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They should have hired an accountant Brendan.

Solicitors don't like doing accountants' work for the same reason that accountants dislike giving legal advice.

Had they asked beforehand on AAM, they would have been told to have a go themselves.

People continually miss the obvious fact that the making of a tax return or application in respect of a property sale is a serious undertaking and it is very easy to fall foul of a complex or indeed any Revenue process.
 
We sold the house last year and bought a new house and we got told that even if you are exempt from paying tax because of the relief for the PPR we needed to file a return anyway, and that's what we did. I just called revenue and there was a mistake on their assessment, they didnt tick the box for full relief. So we will get a new assessment form with 0 tax due.. Thanks all for your replies
 
CGTQuestion said:
we got told that even if you are exempt from paying tax because of the relief for the PPR we needed to file a return anyway,
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Told by whom?
CGTQuestion said:
I just called revenue and there was a mistake on their assessment, they didnt tick the box for full relief. So we will get a new assessment form with 0 tax due..
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This is a bit confusing - who is "they" and "we"?
Revenue don't click the box for full relief on somebody else's CG1 return!
 
Submission of paper returns can lead to errors by Revenue. Better to take the time to get set up on ROS because it means less work for Revenue staff and less risk of error. You can prepare forms in draft offline (Return Preparation Facility), ensure all relevant exemptions are claimed and the declared liability is what you want it to be, before submitting. But then you probably have to file annually unless you request formal de-registration.
 
How can you do an electronic CG1 return if you're not self assessed? I can't see any way to do that. Am I overlooking something?

When and how do you pay and file CGT?

This page outlines the steps to follow in order to pay and file Capital Gains Tax
www.revenue.ie www.revenue.ie

How to file your CGT return​

There are several different CGT returns:
  • Form CG1 – if you do not usually submit annual tax returns or use the online Form 12. The Form CG1 is only available in paper version. For more information on where to request a CG1 form please check the Forms ordering service
  • Income Tax Return (Form 12 (paper version) if you are a Pay As You Earn (PAYE) taxpayer who must submit a tax return. You will be unable to report your CGT on an eform 12
  • Income Tax Return (Form 11) – if you are self-employed (or have income that is not taxed under PAYE)
  • Form 1 – if you are a trust or an estate
  • or
  • Form CT1 – for a company.
Use ROS to file your Income Tax Return (Form 11), Form 1 or Form CT1. You can post the Form CG1 or Income Tax Return (Form 12) to your Revenue Office.
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Isn't the Return Preparation Facility an offline version of the ROS "Form 11" self assessment return?

Return Preparation Facility

This page covers using the Return Preparation Facility
www.revenue.ie www.revenue.ie
 
Villaines said:
Better to take the time to get set up on ROS because it means less work for Revenue staff and less risk of error.
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There is no benefit to registering for Self-assessment (ROS) if you are not required to.

You give yourself a more complex income tax return to complete (Form 11 vs Form 12)

You become liable to PRSI on your unearned income, so you could pay more tax than you need to.
 
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ClubMan said:
How can you do an electronic CG1 return if you're not self assessed?
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There is no electronic version for PAYE taxpayers. But you can submit the "paper" version online by downloading the Form CG1 pdf, filling it in digitally, and sending it as an attachment through MyEnquiries (no actual paper involved).
 
Thanks @Corola - I presume you actually have to print, sign and and scan at least one page of the form?

These are not just academic questions as I need to do a CG1 return myself soon. Thanks.
 
I have signed it digitally as well. It is coming from your myAccount mailbox which you have to log into securely, so that seems to be sufficient verification.
 
Corola said:
There is no benefit to registering for Self-assessment (ROS) if you are not required to.

You give yourself a more complex income tax return to complete (Form 11 vs Form 12)

You become liable to PRSI on your unearned income, so you could pay more in tax than you need to.
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Do you become liable for PRSI if you say you're doing the return voluntarily? I agree there's admin.

I just don't like paper forms with Revenue - I stand by that :)
 
Yes, you will become a 'chargeable person' if you submit a Form 11/Self-assessment return for any reason.

A person is not a 'chargeable person' if their unearned income is less than €5,000 and this income is taxed under the PAYE system (Form 12/myAccount).

People aged under 16 and over 70 are exempt from PRSI and are not liable for the charge.
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Corola said:
People aged under 16 and over 70 are exempt from PRSI
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66+ and in receipt of the state contributory pension exempts one from PRSI too.

Pay Related Social Insurance (PRSI) and Universal Social Charge (USC)

This section explains Pay Related Social Insurance (PRSI) and Universal Social Charge (USC)
www.revenue.ie www.revenue.ie
From 1 January 2024, you will be able to draw down your State Pension (Contributory) between age 66 and 70. You will continue to be liable for PRSI until you:
  • are awarded the State Pension (Contributory)
  • or
  • reach age 70.
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