Nonresident Capital Gains Tax on house

Hi all,

I have a property in Ireland that I bought when I lived there. Though I am an Irish citizen, I am currently living in the US and will probably do so for the forseeable future.

As an emigrant resident in the US, do I still have to pay for CGT on the sale of my house in Ireland?

Thanks in advance,
macdommy74

Yes, but you can get some relief for the period, if any, during which you occupied the house. Also, if you purchased the house prior to 2003, you get indexation relief on the cost.

If you are also liable to CGT in the US, you may be able to offset this by the CGT paid, if any, in Ireland depending on the details in the Double Taxation treaty between Ireland and US

Many thanks JPD,

Can you explain what you mean by both relief during which I occupied the house (4 years vs currently 2 years rented)and indexation relief on the cost (~Euro150k) to me, please? Selling price if I sell soon will be approx Euro330k before charges etc.

Please excuse my ignorance,
macdommy

You owned the house for 6 years in total.
You purchased for 150K plus expenses legal say 2K

Using the multiplier (Appendix 1 pg 37) for 2000/01 (assuming the property was bought after 6th April 2000. increases the purchase price to 174K
Sell for 330K (less expenses Legal & Auctioneers 6K = 324K

Gain 324 - 174 = 150
You did not live in the property for 2 years (you are allowed one year to dispose of the property) so you are liable to CGT on one year
150K /6 = 25 less 1.270 (Annual allowance) @ 20% = 4.746

Did you purchase the property as a first time buyer and avail of the reduced stamp duty (don't know what stamp duty rates applied at the time).
When you let the property did you pay the increased stamp duty.
Did you appoint an agent in Ireland to collect the rent. If not then your tenant could be liable for any tax which may be due. See [broken link removed] then "What if Rents are payable to a non-resident landlord?"

Assuming you bought the house in 2000 and sell it in 2006, then calculations go as follows

Sales proceeds 330,000
less selling costs, say 20,000 (solicitors fees, estate aents, etc)
Net proceeds 310,000

Cost (in 2000) 150,000 (including all solicitor's fees, etc etc)
Indexation relief factor 1.144
Indexed cost 150,000 x 1.144 = 171,600

Net gain = 310,000 - 171,600 = 138,400

You owned the house for 6 years ie 72 months
You occupied the house for 4 years ie 48 months
You did not occupy house for 2 years ie 24 months (whether house is rented or not is immaterial)
Last 12 months is deemed a period of occupation irregardless of actual situation, so period of occupation is 48 + 12 = 60 months

Relief = gain x period occupation / period of ownership
= 138,400 x 60 / 72 = 115,333

Taxable gain = 138,400 - 115,333 = 23,067
Less annual allowance (if not already used) of 1,270= 21,797
Tax at 20% = 4,359
Obviously you need to substitute the exact periods of ownership/occupation (in months) as well as the costs to get a better estimate. The indexation factors depend on when you bought the house

6th April 99 - 5th April 2000 1.193
6th April 2000 - 5th April 2001 1.144
6th April 2001 - 31st Dec 2001 1.087
1st Jan 2002 - 31st Dec 2002 1.049
After 31st Dec 2002, 1 ie no indexation relief

Thanks guys,

Sincerely much appreciated.

macdommy74