CGT when home owners split

[promoter]

Hi

Case: Non-married couple purchase a house and live there for four years. Split up and one makes a payment to the other, name removed from deeds and property is remortgaged by the single owner. Entire property is then rented out for a few years and now the owner wants to sell so CGT arises (with abatement for the number of years of PPR).

Is the acquisition cost calculated as the sum of (purchase price x 0.5) plus the payment to buy the other party out?

Or
Is the market value at time of the split somehow taken into account?

Or
Can the current owner claim for the full acquisition cost even though both parties were on the deeds & mortgage.

Apologies if it's an obvious question but can't seem to find these circumstances on Revenue website or anywhere else.

thanks

 

[Joe_90]

I'd imagine that some share of a loan was taken over?

So you would have 1/2 the original cost plus 1/2 the loan plus and cash payment on the split.

Presuming that this equates to the market value at the time.

 

[mandelbrot]

The acquisition cost is what you paid to acquire your interest in the house. So you acquired a half interest for X, and subsequently a further half interest for Y.

If either acquisition was not made at arms length then market value may be imposed (But bear in mind that may result in a gift giving rise to CAT).

Based on the facts as outlined PPR would apply to the X half, but none would be due on the Y half (as it wasn't your PPR at anytime after you acquired it).

 

[MortgageGuy]

I think the X by 0.5 applies to the first persons half, the purchase of the remaining 50% would be a CAT issue rather than a CGT one at the point of sale.

Assuming there was no loss or gain then 100% of the selling price would qualify for PPR relief minus the years it was rented out, but there is also a rule where the last 12 months of ownership get classified as a PPR even if you didn't live there so don't forget that aspect of it. Can't recall how the acquisition and selling costs are treated, I think they are apportioned (anybody know that?)