Restriction on the Development of land

Capital Gains Tax (CGT) Overview:

• Sale price: €500,000

• Cost: €60,000 (Indexed @ 1.553 => €93,180)

• Principal Private Residence Relief: €406,820

• Annual exemption applied: €242,527

• Taxable gain: €241,257

• CGT rate (33%): €79,615

Gain Breakdown:

• Total gain: €406,820

  • Less gain attributable to office (25%): €101,705

  • Gain attributable to residence: €305,115

• Principal Private Residence Relief Calculation:

  • €305,115 * (19.25/35.75) = €164,293

Development Land Relief:

• Relief does not apply to the part of gain reflecting "development value"

• Gain calculated normally with restrictions related to development land

Example 27.3 - Claire's Property Sale:

• Bought for residence value: €88,882

• Sold to developer for: €900,000

  • Current residence value: €300,000

• Gain calculation:

  • Sale proceeds: €900,000

  • Cost (current value): €88,882

  • Indexed acquisition cost: €145,500

  • Incidental costs: €10,745 (acquisition), €15,000 (disposal)

  • Total gain: €721,910

  • Less principal private residence relief: €131,910

  • Chargeable gain: €590,000

Example 27.4 - Adjusted Cost Price:

• Cost price: €177,764

• Computation similar to Example 27.3 adjusts for different input values

• Development land gain calculation leads to taxable gain of €495,746

Lottery/Game Sale of Principal Private Residence:

• Relief is restricted if sold as part of a lottery/game, only to market value

• Costs of disposal must be apportioned to the market value of the property.