QI bought an apartment in 2012 with my redundancy money for €150,000. I am 70 years old, retired with a private pension, and now I am considering selling it for around €260,000. I have paid for my own house and have adult children. What Capital Gains Tax (CGT) would I have to pay on the gain? Is there a way I can give my two kids each half of the winnings and not have to pay CBT?
a Capital gains tax is paid on any capital gain realized when you dispose of an asset. In your case, the tax is the difference between the sale proceeds and the purchase price, according to Taxback.com director Marian Ryan.
The first €1,270 of each realized profit is exempt from tax. The current rate of the CGT is 33 pcs. So the calculation is easy, Ms. Ryan said. It is $260,000 minus $150,000, minus $1,270 at 33 pcs.
There are a number of schemes that can reduce the bill. In your case, the primary residence exemption may apply if the property has been used as a primary residence for a specified period of ownership. Or the seven-year exemption may apply.
Passing the profits on to your children will not eliminate the capital gains tax owed. Rather, they are subject to capital acquisition tax (CAT) on the donation of money.
Tax-free thresholds are lifetime thresholds
Most likely, CAT is eliminated by, firstly, the annual gift exemption of $3,000 and secondly by the tax-free threshold each of your children has below the group A threshold of $335,000.
These tax-free thresholds are lifetime thresholds, so any gifts or inheritances previously received must be added up. If property passes to the children on your death, no CGT is due. However, CAT does apply. If they later dispose of the house, CGT is liable again.
Q My boss does not offer an occupational pension scheme. I am a single mother. Although I’ve worked for my employer for the past 10 years, between my rent and the cost of raising three kids, I don’t make enough to make it worth opening a personal pension. However, automatic enrollment (AE) would make a retirement worthwhile because I would have the benefit of employer and state contributions. However, it seems that the allowed contributions under LR are very small in the first years. Can I, or my employer, pay more?
a The government has set a target for the automatic enrollment (AE) scheme to start in 2024.
Under the proposed scheme, employee and employer contributions will be capped at 1.5 percent of earnings for the first three years, while the state’s contribution will be capped at 0.5 percent, according to Glenn Gaughran, chief of business development at the Independent Trustee Company. .
This brings the total allowable contributions in the first three years to 3.5 percent of your earnings, which is low, he said.
The contributions of the employee and the employer are limited to 1.5 percent of the income for the first three years
The current auto-enrollment plans do not seem to allow for any flexibility with regard to the amounts that can be contributed to the scheme, Mr Gaughran said.
Q I’m going to travel Europe for six months and I’m taking my car. My car insurance does not cover foreign travel for more than 90 days during a 12 month policy period. My policy is due to renew next month, but so far I have not been able to find an insurer that offers comprehensive cover for my time in Europe. What should I do?
a According to Billy Shannon of Aviva Insurance Ireland, all EU countries comply with the EU’s First Motor Insurance Directive, which states that any insurance policy issued in the EU must provide the minimum insurance cover required by law in any other EU country.
Most insurers offer full policy cover for a certain period of time (30 or 31 days) in the EU and after that the rules may vary from insurer to insurer.
Some will reduce cover to the minimum insurance cover required by law in the EU country being visited (usually only third party cover), while others allow an extension of full cover.
Most insurers offer full policy cover for a certain period of time
However, they may charge an additional premium for this and the length of the renewal may vary from insurer to insurer, Mr Shannon said. He said you should discuss the issue with your insurer.
Your existing insurer may be willing to review your case on an individual basis. You can also use an insurance broker who advises you and has access to a variety of insurance products from different markets.urance companies.