CGT on sale of property

[roland]

My father has a small house in rural Cork which he doesn't use. It was put into joint names between my father and mother when my mother was alive, after my mother was gifted it from an aunt of hers in the early 1980s. The house was originally built in about the 1920s I think.

If my mother now sells this, what CGT is she liable for (and/or are there other tax implications)? My usual understanding is that CGT would be payable on the sale proceeds less allowable costs less the purchase cost (indexed). However, in this instance, what becomes 'the purchase cost'?

 

[roland]

CGT on sale

Apologies, edits below:

My father has a small house in rural Cork which he doesn't use. It was put into joint names between my father and mother when my mother was alive, after my mother was gifted it from an aunt of hers in the early 1980s. The house was originally built in about the 1920s I think.

If my father now sells this, what CGT is he liable for (and/or are there other tax implications)? My usual understanding is that CGT would be payable on the sale proceeds less allowable costs less the purchase cost (indexed). However, in this instance, what becomes 'the purchase cost'?

 

[Capall]

Re: CGT on sale

Your father took owneship of the house in two stages
1)Gift of half share from wife
2)Inheritance of half share from wife

1)There are no tax implications for transfers between spouses
however your father would have also inherited your mothers original base cost which would have been the market value of that half share at the time it came into your mothers ownership.
2)The base cost for the inheritance is the market value at the date of death

 

[roland]

cgt

Thanks Capall. That's very useful.

Two final questions:

- My mother and father spent some money (significant in relation to the value of the house) totally renovating the property back in the late 80s. Can this can be taken into account in the CGT calc?

- The property is a bit of a stand-alone one in a rural area, and as such I can't see there will be any easy way to ascertain its market value at the two dates in question (and particularly given the dates are some timein the past). Assuming we can come up with some measure (even just on local knowledge), how does the revenue judge the reasonableness of this or otherwise? Or is there some accepted method generally used (e.g. put to an independent valuer?).

Thanks for help.

 

[jem]

Re: cgt

Local auctioneer will do a valuation for you you just tell them the dates.