Capital Gains Tax query on selling a second home in Ireland
Discussion
Hi All
Need some wisdom, so immediately thought “Pistonheads”.
About 1997, our family home in Southern Ireland had to be sold, which would have left my Dad homeless. The 4 kids bought the house with a mortgage, so our Dad could live there. We cleared the mortgage about 5 years ago. Roll forward 20 years to now, Dad can no longer cope on his own so needs to go into a home. All of us have our own family homes.
We are now left with an empty house. As three of us live in the UK and one in Ireland, in due course we will sell the house but are in no hurry to sell. Some very rough figures would suggest the difference between the purchase price and current value would be about €120k, so call it €30k each.
We were a little surprised to find that we will / may be liable for Capital Gains Tax. We wanted to do the right thing and looks like we will taxed to hell for it.
Any advice on the most effective way to minimize our CGT bill please (for my brother in Ireland and the remainder in the UK)?
Happy to chuck money into pensions / invest for kids / ISA's / whatever is CGT efficient.
Thank you,
Need some wisdom, so immediately thought “Pistonheads”.
About 1997, our family home in Southern Ireland had to be sold, which would have left my Dad homeless. The 4 kids bought the house with a mortgage, so our Dad could live there. We cleared the mortgage about 5 years ago. Roll forward 20 years to now, Dad can no longer cope on his own so needs to go into a home. All of us have our own family homes.
We are now left with an empty house. As three of us live in the UK and one in Ireland, in due course we will sell the house but are in no hurry to sell. Some very rough figures would suggest the difference between the purchase price and current value would be about €120k, so call it €30k each.
We were a little surprised to find that we will / may be liable for Capital Gains Tax. We wanted to do the right thing and looks like we will taxed to hell for it.
Any advice on the most effective way to minimize our CGT bill please (for my brother in Ireland and the remainder in the UK)?
Happy to chuck money into pensions / invest for kids / ISA's / whatever is CGT efficient.
Thank you,
Edited by gf15 on Saturday 27th January 08:59
What part of Ireland (i.e Irish Republic or Northern Ireland)?
In a away it's academic.
You own an asset.
You are a UK tax resident.
You sell the asset
You make a profit/gain
You may have a UK Capital Gains Tax liability.
If the property is owned by a group of people, the gain is split between the owners and each owner has their own CGT Annual Allowance, so each individual may not have much (if any) tax to pay.
In a away it's academic.
You own an asset.
You are a UK tax resident.
You sell the asset
You make a profit/gain
You may have a UK Capital Gains Tax liability.
If the property is owned by a group of people, the gain is split between the owners and each owner has their own CGT Annual Allowance, so each individual may not have much (if any) tax to pay.
There is a verbal trust here. S53 Law of Property Act 1925. You have collectively held as trustees for his benefit by the sound of it. If that is the case providing this is evidenced in writing prior to dads death or disposal (whichever the sooner) then main residence relief for dad could apply.
Hope that helps.
Spence
Hope that helps.
Spence
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