selling holiday home

R

Rasher

Guest
My parents have to sell their holiday home as they are not in a position to use it because they can no longer drive due to health reasons which are not life threatening thank god. Both are retired with the only income being my father’s contributory pension.



They purchased the house exactly 5 years ago for 105000 punts (bought with savings and a redundancy received by my mother) and have now been offered 270000 euro.

I estimate they will have to pay 27000 euro in capital gains.



My dad has made a lot of DIY improvements on the house and wants to know can this be included to reduce the tax bill; He of course does not have any receipts for materials etc.



My younger sister is also in college and is receiving a full grant.

They are also concerned that my sister will not qualify for her grant for the next 3 years because the sale of the property will be included in the annual means test.



The holiday home was up until now their pension fund however they are now worried that the loss of the university grant will put a huge cost on them and wipe out the cash received from the sale of the house.



Any advice would be appreciated.
 
In relation to the CGT issue, this is a self assessment tax, and so on a practical basis, your parents can put in their return, include any enhancement expenditure, and if the revenue accept their calculation, thats the end of it. In making the return, theoretically you do not have to send receipts. In some cases there is an audit ( supposedly randomly selected) and if there is an audit, they may be asked for receipts etc. Again, on a practical level, the revenue are usually fairly ok to deal with, and they dont always insist on receipts- for eg I have had a client who did numerous bits of enhancement to a house, and never got receipts, and in dealing with her audited CGT return, the revenue accepted an estimate from a local builder who visited the property, had the renovations pointed out to him, and then gave his estimate on how much they would have cost- this tallied with the clients account, and the revenue accepted it. I would imagine it is up to the individual tax office. So realistically they should include all enhancement expenditure ( this only includes things like fixtures and major renovation- not decoration ) and the professional fees on purchase and sale ( including auctioneers and legal fees) and stamp duty on purchase if there was any.


As to the grant being means tested, I'm afraid I dont know- could you contact the relevant department and make an enquiry?
 
Vanilla
Thank you for the feedback, I will contact the VEC in regard to the grant assesment procedure

Rasher
 
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