Ex family home sale CGT fully payable after a period of non residency?

[1eyeonthefuture]

A person buys a new home and holds on to thier existing home (which they had lived in 15 years plus) with the intention to renting it out.
After 2 years of renting same out they decide instead to sell the old family home are they then liable for full CGT on the property? I. E. Have they completely lost the exemption with respect of same or is there a sliding scale?
Thanks

 

[Paul O Mahoney]

A person buys a new home and holds on to thier existing home (which they had lived in 15 years plus) with the intention to renting it out.
After 2 years they decide instead to sell the old family home are they then liable for full CGT on the property? I. E. Have they completely lost the exemption with respect of same or is there a sliding scale?
Thanks

So, it wasn't rented or lived in the 2 years?

Worst case scenario any gain would be 15/17ths would be tax exempt, leaving 2/17ths liable if theres a gain.

Best case, as it wasn't rented the whole gain is exempt from CGT as it was your PPR.

Others will give a more precise explanation but I would imagine the 2 above is the case.

 

[1eyeonthefuture]

So, it wasn't rented or lived in the 2 years?

Worst case scenario any gain would be 15/17ths would be tax exempt, leaving 2/17ths liable if theres a gain.

Best case, as it wasn't rented the whole gain is exempt from CGT as it was your PPR.

Others will give a more precise explanation but I would imagine the 2 above is the case.

Thanks Paul. Have amended to show that the former ppr has been rented out in the interim.

 

[Paul O Mahoney]

Thanks Paul. Have amended to show that the former ppr has been rented out in the interim.

Ok its number 1 then 15/17ths exemption on the gain. Of course selling costs would also be deductible when selling.

 

[Early Riser]

Ok its number 1 then 15/17ths exemption on the gain. Of course selling costs would also be deductible when selling.

Should that not be 16/17 exempt? The last year (12 months) before the sale completion being exempt, even if rented out?

 

[Paul O Mahoney]

Should that not be 16/17 exempt? The last year (12 months) before the sale completion being exempt, even if rented out?

That was in the back of my mind but we don't know when the house stopped being the PPR. Or does that not make a difference?

 

[Early Riser]

According to Revenue "The last 12 months of ownership of a PPR is considered to be included in your period of occupation."

And this is from the PayLessTax website:

"If you owned the property for say 10 years and initially occupied it as your residence for 5 years and let it out for 5 years then four-tenths of the gain is liable for tax. The first 5 years and the last year are treated as your period of private residence use and that part of the gain is not taxable.
When you have used a property as your private residence you are entitled to treat the last 12 months of ownership as being part of your private residence period of use."

 

[Paul O Mahoney]

So it looks like 16/17 exempt from CGT