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I very much doubt it.1. I know that you can count Stamp Duty as a cost of acquisition in calculating CGT but can you count the interest and penalties which may have been paid in a Stamp Duty Clawback??
If you mean a property originally bought as an owner occupied PPR which is rented out within 5 years of purchase (other than under the owner occupier rent a room scheme) then it's whatever SD an investor would have paid on the original purchase less any SD that you actually paid (possible none). And it's an all or nothing clawback and not calculated pro rate based on how far into the 5 years you rent the property out.2. Can someone clear up for me how one might calculate CGT when the property became an investment property sometime after the acquisition.
You need to apportion the gain on a time basis - % as ppr is exempt, % balance is taxable. You can count the last 12 months as exempt if the property was your ppr at any time.
This is wrong. The SD clawback is not calculated pro rata. As I explained above it is an all or nothing issue. If the property is rented out within the 5 years it applies in full. If it is rented out after that then no clawback applies. If you rent out after 3 years then the clawback applies in full and not just 2/5ths of it or anything like that.Just wondering how I calculate the "time basis" %. Is it to the day (as Clawback penalty is)
This is wrong. The SD clawback is not calculated pro rata. As I explained above it is an all or nothing issue. If the property is rented out within the 5 years it applies in full. If it is rented out after that then no clawback applies. If you rent out after 3 years then the clawback applies in full and not just 2/5ths of it or anything like that.
You cannot use any SD interest/penalties to effectively increase your purchase price (the Revenue will not allow you to gain a tax break from breaking the law!)Any ideas on my question of how exactly pro rata CGT is calculated. To the day or month??
Thanks ClubMan - I had forgotten. Bought in 2002 so 1.049... hooray!(a) is the approach outlined on [broken link removed] anyway.
Don't forget about indexation relief up to 2003 (?) if applicable.
It's the same boat for things like rent relief, you get an amount X as the relief, but your gain in hand is a % of X so I can't say this seems anything different.... and I still argue that you're only getting a % of your A.E. that way...
The annual exemption means that you avoid paying 20% CGT on €1,270. This is why it's deducted from the gain before the tax is calculated. You can't work out your liability and then subtract €1,270 from it.I still argue that you're only getting a % of your A.E. that way...
but obviously better!!For example:
Gain: €2,000
Less exemption: €1,270
Taxable gain: €730
CGT @ 20%: €146
If you did it the other way:
Gain: €2,000
CGT @ 20%: €400
Less exemption: €1,270
Actual liability: €0 (with €870 of your exemption left over!)
Which is obviously wrong!
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