CGT Question

Greentea

I have put my house (second property) on the market. Im trying to avoid CGT as I will have owned this property for 3 years in August.

Am I correct in assuming if the completition runs into September/Oct/Nov, then im over the 36 months threashold, and will have to calculate CGT for these months?

Rafter

Green tea,

I believe it is an all or nothing provision. In other words, if you sell within 3 years there is no liability, if you don't then you have to calculate CGT in full, not just on the additional months.

The three year rule works if you buy a second home, move into it, rent out the first and then sell that within 3 years. Not sure this applies in your case?

You can also 'elect' which house is your primary residence to avoid CGT, although this may defer a larger tax liability onto the property that remains.

A couple who are not married can also elect to treat two properties as being one each to avoid cgt.

As far as the 3 year deadline, I imagine it is the completion date that sets the 3 year time, not when you put the property on the market.

Good luck.

R.

Richie(UK)

Hi,

In addition to Rafter's comments, note that it is the final 36 months that are exempt (not the first 36 months). How long did you occupy the property at the start of your ownership (it must have been your main residence at some time in order to qualify for PPR)?

The Revenue's help sheet may be found here.

PS : Its not all or nothing. If its your PPR for a year, then you move out and sell 4 years later (5 years total ownership) you pay CGT on 1/5 of the calculated gain (the other 4 years being the first year and the final 3).

Rafter

I was wrong - thanks for clarifying Richie. R.