Minimising CGT and indexation

B

bmount

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Hi

My wife and I finally had enough of being a "landlord" and need to cash in our only investment bought in 1995 in order to fund our older boys education and to stop being permanenty cash-poor.

Of course there is no real allowances of note, decent thresholds, or incentives for owners of just the one rental property, with the crippling 33% CGT.

So on the indexation front (which stopped in 2002 I think), we would like to ensure we maximise everything we can to reduce CGT.

In 2000, 5 years after purchase, we topped up the mortgage by 50k IEP (lets say €65k) to do internal improvements on the cottage.

The CGT indexation relief guidance says the relief also applies to "cost of enhancing the value of an asset" so clearly we want to do that.

At this stage we have no records/receipts of any of the work done from the topup but we probably could if needed ask Ulster Bank to furnish proof of the topup.

Can we include this in the indexation relief ? i e instead of €100k (indexed to 2002) can the indexation relief be €100k plus the 65k improvements topup (indexed to 2002) ?

Its worth 400k with 90k mortgage still, so a 100k CGT is a sickening amount (to us at least, after both working hard last 35 years).

Does the CGT submission involve providing supporting information ?

thanks for any help.
 
From the looks of things you spent a relatively large sum of money in proportion to the value of the property.

If the work completed (and I know it is a long time now) is obviously reflected in the property, you should consult with your tax adviser on whether a deduction can be claimed.

Is there anything at all you can get your hands on that could provide back up? Bank statements of payments to contractors? Are any of the firms or tradespeople you used still in business? Any correspondence with tenants re the work completed etc?
 
From 2010 for more redecorating, new kitchen electrical goods and some furniture we claimed 8k approx but thats split over the standard 8 years depreciation 12.5% per annum.

But somehow we never claimed for the work done with the year 2000 topup. The extra mortgage interest paid was of course claimed annually.
I may be able to track down the builder and get a letter from Ulster but I cant find any of this

As we would be anxious to include this, do you know if documentation is required or is it a self assessment like Form 11 ?

thank you for the replies
 
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