Sunday Independent (Ireland) - Business & Appointments - - FRONT PAGE -

An­other tricky area in which peo­ple could eas­ily get caught out is in re­la­tion to any Cap­i­tal Gains Tax bill due from the sale of an in­vest­ment or sec­ond prop­erty. The rea­son for this is that any CGT due must typ­i­cally be paid in the year the prop­erty is sold — though it is usu­ally the fol­low­ing year that any prof­its made from that sale are de­clared in a tax re­turn.

So should you have sold a prop­erty in 2016 and be li­able for CGT on any prof­its made from the sale, in most cases you should have al­ready paid your CGT bill last year — even though you’re only declar­ing the prof­its made from the 2016 sale when fil­ing your tax re­turn this year.

Sim­i­larly, should you have sold a prop­erty in 2017 and face a CGT bill as a re­sult, you don’t have to de­clare the prof­its from the sale un­til you are fil­ing your tax re­turn in 2018 — though you must usu­ally set­tle your CGT bill in 2017.

“If the sale of a house (such as an in­vest­ment prop­erty) in 2017 gives rise to CGT, the CGT must usu­ally be paid in 2017,” said O’neill.

“If the con­tract for sale is signed be­tween Jan­uary 1, 2017 and Novem­ber 30, 2017, the CGT must be paid be­fore De­cem­ber 15, 2017. The CGT on sales aris­ing in De­cem­ber 2017 will have to be paid by Jan­uary 15, 2018.

The ac­tual de­tails of the 2017 sale do not get re­ported un­til 2018 in the 2017 tax re­turn, which is to be filed by Oc­to­ber 2018.

“There is a key dif­fer­ence be­tween the date the con­tract is signed and the date the sale closes — the ear­lier date dic­tates when the CGT must be paid.”

Newspapers in English

Newspapers from Ireland

© PressReader. All rights reserved.