position regarding CGT

A

andrea

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I bought a house with my ex 10 years ago for 50k. 5 years ago we split and I bought their share of the house and ended up with a new mortgage of near enough to 100k which incorporated some of the existing value of the house and a bit of a topup to renovate.
Im about to move and rent the house out. If I sell the house in another 10 years I know Im liable for CGT on the profit. But on what price? The original 50k or the value of the house when I bought my ex out which would have been around the 140k mark?

TIA
 
Let's assume the following:

  • When you bought the property 10 years ago jointly with your ex you bought half for €25K (or was it IR£25K? - let's assume € for now)
  • Then 5 years ago you bought the other half for, say, €90K
  • So your acquisition costs were €25K in 1995 and €90K in 2000.
Then....
  • When it comes to calculating any eventual CGT liability these acquisition costs can be indexed for inflation up to 2003 using the relevant CGT multipliers (see [broken link removed]).
  • If you rent the property out then part of the resale gain will be liable for CGT - e.g. if you owned the property for x years, lived in it for y years and then rented it out for z years (i.e. x = y + z) then (z-1)/x is the fraction of the gain assessable for CGT.
  • When it comes to calculating the assessable gain and your CGT liability then you should calculate the figures for each half of the property separately using the relevant acquisition cost for each half
I think that this is the correct tax treatment but if in doubt get independent, professional advice.
 
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