Help with CGT calculation, enhancement query, IEP to Euro, indexation, what else can be deducted

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Bronte

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Rough figures. I did a major renovation of a rental property when first purchased. As in completely gutted the place. Prior to letting. Electrics, plumbing, bathrooms, kitchens etc. Total cost 100K. Wrote of 60K under the Countrywide refurbishment scheme.

- Can I write off 40K for CGT enhancement (obviously never claimed it under rental tax)
- The mortgage interest was not deductable for a few months, can I claim this now as a capital cost, (that this cost is capitalised)
- anyone have a CGT template, a simple one
- ditto which shows one year and 6 months as principal private residence
- anyone have a CGT template a more complex one with the indexation and pound to Euro.
- is stamp duty paid on purchase deductable

This is my current calculation:

Sale price less

Current:
- Less Costs of Disposal, so auctioneer and solicitor (and any legal/ber/corporation/survey etc things)
Past:
- Less enhancement above, indexed, less legal costs on purchase, indexed. Less conversion of garage into flat, indexed.
 
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Bronte said:
Rough figures. I did a major renovation of a rental property when first purchased. As in completely gutted the place. Prior to letting. Electrics, plumbing, bathrooms, kitchens etc. Total cost 100K. Wrote of 60K under the Countrywide refurbishment scheme.

- Can I write off 40K for CGT enhancement (obviously never claimed it under rental tax)
- The mortgage interest was not deductable for a few months, can I claim this now as a capital cost, (that this cost is capitalised)
- anyone have a CGT template, a simple one
- ditto which shows one year and 6 months as principal private residence
- anyone have a CGT template a more complex one with the indexation and pound to Euro.
- is stamp duty paid on purchase deductable

This is my current calculation:

Sale price less

Current:
- Less Costs of Disposal, so auctioneer and solicitor (and any legal/ber/corporation/survey etc things)
Past:
- Less enhancement above, indexed, less legal costs on purchase, indexed. Less conversion of garage into flat, indexed.
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Hasn't your accountant advised you already?

Can I claim for a new door for rental property?

Hey guys Once of my rental properties has an old wooden door that I have had repaired several times. I have decided to get a new paladio composite door. The cost is around €1600. Can I claim this as a capital allowance? I have read mixed opinions online. Thanks guys
www.askaboutmoney.com
I'm doing up CGT at the moment and looking at my old files. My accountant told me that it doesn't matter if an item is expensive. ...
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ClubMan said:
Hasn't your accountant advised you already?
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You're funny. I did CGT a very long time ago on a property sale, and I've now to do a new one so I'm on here because I like to have different viewpoints. What I was referring to in that other thread is more than a decade ago in relation to tax returns on rental income. It's good to keep up to date. I'm not hiring an accountant to do the CGT, though I might, as I've a large loss to offset and it's niggling me revenue might query it. Which if I'm positive could be a good thing as I'm sick of dragging paper files around with me for a few decades.

On here has excellent accountant such as Tommy and also revenue people who shall remain nameless.
 
Thanks for your kind words @Bronte. If you've a large loss forward which is likely to dwarf the gain here, your questions may be somewhat moot unless and to the extent that you expect to enjoy future assessable capital gains - in which case it might well be very worthwhile quantifying the above matters definitively.

I wouldn't automatically assume that your original purchase price should necessarily be discounted for the purposes of the CGT computation by the deductions claimed under the Rural Renewal Scheme (or whatever scheme you refer to). Obviously as a material item, this question alone could have a huge effect on your overall calculation and would be worth getting right

There is no circumstance in which you can get a CGT deduction for mortgage interest.

Stamp duty paid on purchase should indeed be deductible.
 
Yes I'm incurring a very sizeable gain (like you I'm not Dublin based, so sizeable is different !). Just waiting now for the actual transfer to go thru, meanwhile I've a very sizeable loss as well on another property. I know that in one tax year the date of which these occur is not relevant. So in order, I've a capital gain, then I've a capital loss, I take one off the other, leaving me with a capital gain, but I'll only pay tax then of about 10K (after the tax exemption once - for two people).

It's actually working out pretty neat for me, I was just worried when I send in my CGT calculations with a very high Gain which is mostly tax exempt if revenue would look more closely at it. And I do completely agree with you on quantifying things.

Added bonus is it ends the LPT 'guestimates' . I've to indemnity a buyer in relation to a divided property on that. We had legal arguments over whether flats (units) should be separately LPT registered (as I'd done for NPPR) which I refused to do. (one title, one property, one water etc)

I looked at renovating, but if I sunk in a chunk of change and got everything up to spec, then I'd still not be allowed to increase my rents (RPZ). So it's hopeless. It's taken over 2 years and a lot of heartache to terminate the tenancies.
 
T McGibney said:
I wouldn't automatically assume that your original purchase price should necessarily be discounted for the purposes of the CGT computation by the deductions claimed under the Rural Renewal Scheme (or whatever scheme you refer to). Obviously as a material item, this question alone could have a huge effect on your overall calculation and would be worth getting right

There is no circumstance in which you can get a CGT deduction for mortgage interest.

Stamp duty paid on purchase should indeed be deductible.
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- I've figured out the stamp duty plus multiplier
- I'm only going to claim the enhancement of the portion I did not use under The countrywide refurbishment scheme (it was not a rural scheme so I suppose that was a different scheme). You can't be claiming twice.
- I just have to figure out how to deduct my period of occupancy. I know that to the day. But there is a special rule about adding an extra year that I've to figure out, I'm non resident so maybe I don't get that
- I discovered I paid my bank an early redemption fee when I moved banks to get a better rate, I put that in as a cost
- It is so important that I've kept all paperwork, that I cannot emphasise highly enough. Also as the years have gone by I write notes on all my tax calculations for myself so I know how things were at the time, it's nearly impossible to remember decades later
- revenue website is tricky to navigate, I didn't realise there was a complete section just for professionals, where you can find the stuff you want, I looked at UK revenue and there they even have a CGT calculator for taxpayers. This should be available to Irish taxpayers.

I've decided my accountant will do the calculation for me, he's really good and well worth the fee, plus that's deductable too, and I don't want to stupidly get caught for the sake of saving money on hiring a professional. But first I want to do it all myself to see how it works out.

My solicitor also advised me that for historical transactions, where clients no longer have bills, that an accountant does a good 'guestimate' (my words). Which is acceptable to revenue I guess.
 
Bronte said:
- I'm only going to claim the enhancement of the portion I did not use under The countrywide refurbishment scheme (it was not a rural scheme so I suppose that was a different scheme). You can't be claiming twice.
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Get your accountant to check this properly. It's too big an item to miss if you are entitled to it.
Bronte said:
- I just have to figure out how to deduct my period of occupancy. I know that to the day. But there is a special rule about adding an extra year that I've to figure out, I'm non resident so maybe I don't get that
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Calculate that period and add one year to it, assuming you haven't lived there in the past 12 months.
Bronte said:
- I discovered I paid my bank an early redemption fee when I moved banks to get a better rate, I put that in as a cost
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It's definitely not allowable.
Bronte said:
- revenue website is tricky to navigate, I didn't realise there was a complete section just for professionals, where you can find the stuff you want, I looked at UK revenue and there they even have a CGT calculator for taxpayers. This should be available to Irish taxpayers.
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The calculations are easy. Remembering and knowing what to include is the tricky bit.
Bronte said:
I've decided my accountant will do the calculation for me, he's really good and well worth the fee, plus that's deductable too, and I don't want to stupidly get caught for the sake of saving money on hiring a professional.
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Wise
Bronte said:
My solicitor also advised me that for historical transactions, where clients no longer have bills, that an accountant does a good 'guestimate' (my words). Which is acceptable to revenue I guess.
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Sensible
 
Bronte said:
Well that's a pity, I'll have to find something else. I never previously thought about how important it is to have a loss at the same time as a gain. So I've learnt that anyway.
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That sounds like the tax tail wagging the investment dog and doesn't really make much sense.
Having a loss to offset a gain just to avoid tax is less advantageous than having a net gain and paying the tax due.
 
ClubMan said:
That sounds like the tax tail wagging the investment dog and doesn't really make much sense.
Having a loss to offset a gain just to avoid tax is less advantageous than having a net gain and paying the tax due.
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I think it's good to end where I was at because of the RPZ. One buyer is going to put in over 200K and I'm not up for that. It would be just a mess with the RPZ.

At the end of the day I'm going to have a nice sizeable sum to go forward with. It triggers CGT, but it ends RTB, ends historical rental tax returns, and just ends things. I'm carrying around a lot of baggage in relation to too many taxes/events/triggers as well. So I'd like that finished, which I hadn't really thought about. It will be like a weight lifting. Take just the guestimate that was LPT, this will be triggered and confirmed and over. (I was pretty much correct on these)

I'm going to reinvest in one renovation with one child up for it (they tell me). I learnt some valuable things as well on this latest adventure. Today I learnt something amazing about NPPR (I will not share until it is confirmed), I've relearnt how to navigate revenue.ie, become reacquainted with AAM. Realised that the RTB is just as bad as ever. I find it absolutely hilarious that every politician is now lauding us small landlords. The cheek of them. And still they never get it, why we pull out.

And I'm quite excited to see how much my accountant pulls apart my CGT calculations. With added bonus that one of my children wants to see what on earth I'm talking about and how I do my CGT calculation. Tommy is right that the calculation itself is easy, it's the tricky bit of what to put in as it's over a long time period for me.
 
I can't edit the OP. My accountant liked my layout of CGT computation. I might do up a simple one for on here as nobody else seems to have one.

Calculation is:

Sale price less

Current costs:
- Less Costs of Disposal, so auctioneer and solicitor (and any legal/ber/corporation/survey etc things), and accountant for doing the CGT
Past costs:
- Less enhancement expenditure, legal costs on purchase, stamp duty, all using the multiplier if purchased prior to 2003

Minus the personal exemption of €1270

Gain taxed at 33%.

Losses can be offset against a gain in the same year, but can not be carried back. Losses can be carried forward.


If you don't have receipts, you can figure out a reasonable amount. For example if you did a conservatory enhancement 20 years ago and put in 100K that's not realistic. But it is a good idea to keep receipts. Even though revenue have a 6 year rule on keeping records. I didn't have receipts for the initial renovation of our first home as I did not know we would be moving abroad and had no need to keep them for CGT.

(I've no idea how much a conservatory is but everything building wise now is astronomical, I guess 20 years ago it would be about 10K)

A simple CGT is easy, but you can't beat professional advice.
 
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20 years ago I built a brick sunroom with a slate roof and it was 30K. I am not sure if that's any help.

you could use the site www.archive.org to go back and look at conservatory prices around that time. Just put the web addresses of some conservatory suppliers into the time machine box.


Supply Only - Celtech Conservatories - Conservatory Supplier Ireland, Waterford Conservatories, DIY Conservatories Ireland, Cheap Conservatory

Celtech Conservatories - Conservatory Supplier Ireland, Waterford Conservatories, DIY Conservatories Ireland, Cheap Conservatory
web.archive.org
 
Electricity/Gas while property is being sold. Can't use it for income tax as it's between lettings. So can I use it against anything?

My accountant pointed out it's better costs against CGT as the tax is higher than the income tax. Just waiting now for the final solicitors bill.
 
Bronte said:
Electricity/Gas while property is being sold. Can't use it for income tax as it's between lettings. So can I use it against anything?
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I'm pretty sure that the answer is "no".
Bronte said:
My accountant pointed out it's better costs against CGT as the tax is higher than the income tax.
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Only if you're exempt from income tax or paying it at the lower rate (20%).
CGT is 33%, higher rate income tax is 40% (plus PRSI and USC in many cases).
 
Yes but I'm non resident and have lower rents now as I have empty/sold properties. So for me it's 20% for the income tax. Obviously it's different for higher rate tax payers.

It has driven relations of mine nuts that I pay lower because we don't have any other Irish income and they cannot count our income abroad.
 
Anyone know if the accountants costs for doing the CGT return for us is tax deductable in the CGT calculation?
 
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