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I have a property in the UK which was my primary residence.

Customer Question

Hello - I have a property in the UK which was my primary residence. I then moved to Ireland in 2010 and have been domiciled here ever since. I am now looking to sell this property, do I have any CGT liabilities in the Uk or Ireland ?
Submitted: 11 months ago.
Category: Tax
Expert:  bigduckontax replied 11 months ago.
Hello, I am Keith, one of the experts on Just Answer, and happy to be able to help you with your question.
Providing that you have been non resident in the UK for 5 complete tax years since your move to Ireland and before the sale of your property then you are only liable for any gain from an April 2015 valuation and the net selling price. As an EEA citizen you have an Annual Exempt Amount (AEA) of 11.1K to offset this gain and if the property has been let in the interim Lettings Relief (LR) up to 40K may also be available. You will probably have no CGT liability in the UK.
When you left the UK did you complete a Form P85 and send it to HMRC? If you did not you should do so immediately, fortunately there is no time limit to its submission, it is available on the web and can be filed on line. On receipt HMRC will classify you as non resident and this will make dealing with HMRC far easier for you. Under the Double Taxation Convention between the UK and Ireland the same gain cannot be taxed in both jurisdictions. This is achieved by means of tax credits, the tax payable in one country being allowed as a tax credit against any liability in the other. The Convention does not, however, protect you from differences in rates of tax.
Irish tax would be at 33% on any gain made with an 1270 Euro exemption.
I am so sorry to have to rain on your parade.
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Customer: replied 11 months ago.
Hello thanks for your feedback. It appears as though I wont have any UK CGT liability. I did complete all relevant documentation and am registered as a non dom with the HMRC.Regarding the Irish liability I believe I can deduct any enhancements made to the property. If I made a 50k Gain I would be subject to 16,666 CGT but can I deduct the enhancements from the potential tax bill ? I have made about 10k worth of enhancements in the past 18 months.
Expert:  bigduckontax replied 11 months ago.
Thank you for your excellent support.
Here is the advice from the FDC Group regarding improvements and Irish CGT:
'If expenditure is incurred in improvement of an asset, “enhancement expenditure” a deduction for Capital Gains Tax purposes may be allowable. Only capital expenditure is allowed as a deduction and any other expenditure will be treated as an income tax deduction. It is often difficult to determine if a particular cost if purely capital expenditure, in fact it may be a mixture of both capital and revenue expenditure.'
It is therefore possible that the 16.6K odd expenditure will be allowable.

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