CGT on sale of inherited house

[SarahD12]

I’m hoping someone can help with a rather complicated CGT tax query.

In 2012 my father died and my brother, sister and I inherited €191,864 each from his estate. This came in the form of a house which we have since rented out to tenants. The Inheritance Tax threshold at the time of my father’s death was €225,000, so we were each not required to pay inheritance tax.

In January of this year I sold half of my portion of the house to my brother and sister for the sum of €156,250.

Can someone advise if I will be required to pay CGT tax on this lump sum or not?

There appears to be two possible answers to this question:

Answer 1: As the amount I sold it for (€156,250) does not exceed the amount that I inherited (€191,864) I have not made a gain in the sale of the house and therefore am not required to pay CGT.

Answer 2: As I sold half my portion for €156,250, and as my half portion at the time of probate was €95,932 (half of €191,864), then I have in fact made a gain of €60,318 and am required to pay CGT.

Any advice would be greatly appreciated.

Many thanks.

 

[rob oyle]

Just to be clear, you sold a half of your third share in the house - in other words, a one-sixth share of the house to your siblings?

In that case, answer 2 would seem to be the case.

 

[SarahD12]

That's right Rob, I sold one sixth of my share to my siblings.

 

[T McGibney]

Answer 1: As the amount I sold it for (€156,250) does not exceed the amount that I inherited (€191,864) I have not made a gain in the sale of the house and therefore am not required to pay CGT

...
Answer 2: As I sold half my portion for €156,250, and as my half portion at the time of probate was €95,932 (half of €191,864), then I have in fact made a gain of €60,318 and am required to pay CGT.

Sorry, I can't make head nor tail of the facts you've listed, particularly Answer 2.

 

[SarahD12]

Sorry, ignore my previous reply Rob. I sold a one sixth share of the house to my siblings. Thanks

 

[David_Dublin]

Yes, answer 2 is the right answer.

 

[Pugmister]

Ownership timeline

December 2012
Yourself - 2/6 (33.33%)
Sibling 1 - 2/6 (33.33%)
Sibling 2 - 2/6 (33.33%)

January 2017
Yourself - 1/6 (16.66%)
Sibling 1 - 2.5/6 (41.66%)
Sibling 2 - 2.5/6 (41.66%)

Based on the above being correct you have have made a captial gain and CGT is due as outlined in scenario 2.