cgt calculation

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Jackjack336
Posts: 6
Joined: 05 Jun 2019 03:34

cgt calculation

Post by Jackjack336 »

Hi All,
No matter where I look on the web I cannot find HOW a possible reduction in CGT liability is calculated when referencing the inflation rate. In this forum it states the inflation rate used is that which applies in the "month preceding the disposal of the asset and the month of acquisition" Does this still apply? Is it the difference between the two figures? Is it an average of the two? or is the measure now something completely different .An example CGT liability calculation for dummies at least relating to inflation would be really helpful. Thanks
Pantheman
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Joined: 26 Jan 2008 14:44
Location: Famagusta District
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Re: cgt calculation

Post by Pantheman »

Here's one I did previously.

Here is an example of a CGT calculation, just put in the numbers you have and work it out. It should be close to what the Tax Dept. will do anyway.

Here is an example of a CGT calculation, just put in the numbers you have and work it out. It should be close to what the Tax Dept. will do anyway.

EXAMPLE OF ESTIMATE OF CAPITAL GAINS TAX

1970: Α bought a building site for Cy.P. 1.500.
1990: Α transferred the building site to his son by gift.
1.2012 Β sold the building site to C for €200.000.
The value of the building site as at 1.1.1980 is €5.000.
Retail prices index on 1.1.1980: 67,15
Retail prices index on 1.2012: 224,82
Index difference: 224,82- 67,15= 157,67

Disposable Product 200,000
Minus 1.1.1980 value 5000
Minus inflation 5000x(157.67/67.15) 11,740
Minus Allowance (first sale( 17,086
TOTAL DEDUCTIONS 33,826
PROFIT 166,174
CGT 166,174@20% 33,235

Hope this helps
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Jackjack336
Posts: 6
Joined: 05 Jun 2019 03:34

Re: cgt calculation

Post by Jackjack336 »

Hi Pantheman

That is indeed a great help. Thank you

Its clear that you are a true property expert so..

Im going to push the boat out a bit further here and ask whether I have made a mistake?

My estate agent has recommended a lawyer to act on my behalf as he is both quick and competitively priced. I have already agreed to this!

The lawyer has also asked for me to sign a doc that gives him power of attorney to act on my behalf. Is this a usual occurrence?

Lastly-while I am not a resident in Cyprus ,I have bought and owned only the one villa since 2005 ,my last visit being in September this year what is the possibility of claiming CGT relief based on the 85k euros rather than the 17k allowance you highlighted in your example. Of course this would be your opinion only and would have no bearing on any outcomes.

Thanks again
Pantheman
Posts: 657
Joined: 26 Jan 2008 14:44
Location: Famagusta District
Contact:

Re: cgt calculation

Post by Pantheman »

Jackjack336 wrote: 09 Dec 2020 02:43 Hi Pantheman

That is indeed a great help. Thank you

Its clear that you are a true property expert so..

Im going to push the boat out a bit further here and ask whether I have made a mistake?

My estate agent has recommended a lawyer to act on my behalf as he is both quick and competitively priced. I have already agreed to this!

The lawyer has also asked for me to sign a doc that gives him power of attorney to act on my behalf. Is this a usual occurrence?

Lastly-while I am not a resident in Cyprus ,I have bought and owned only the one villa since 2005 ,my last visit being in September this year what is the possibility of claiming CGT relief based on the 85k euros rather than the 17k allowance you highlighted in your example. Of course this would be your opinion only and would have no bearing on any outcomes.

Thanks again
Hello,

The power of attorney is the usual tool if you are not in Cyprus to sign, however, ensure it is not a general power, but for a specific task, like to sell your house, and to do all things necessary to that effect, like register utilities to the buyer, transfer the money to you etc etc.

When we do a PoA our lawyer does not abuse it, but will seek the permission from the seller (ie you) before he does any actions, like pay the agent, of send the money etc etc.

Then the allowances, you may have owned the property since 2005, but it was not your permanent residence and you must show that it was to make the large claim. The tax office will ask for print outs from the electricity board for the last 5 years to assess the consumption, I think it is unlikely that you will get the higher allowance, but hey, anything is possible! Do you even have a yellow slip (pink slip, alien card???) If not then it could not possibly be your permanent residence.

Good luck.

P.S. May I ask who your lawyer is?? (you can pm me if you wish)
For all your property needs, we offer Trust, Integrity, Honesty.
FSB Properties Ltd
Registered and Licensed Agency Co. Reg. No. 234, Lic. No. 250 (Adamos Vrachimis)
Member of ETEK Registration No. A201999
https://www.fsbproperties.com
Nigel Howarth
Site Admin
Posts: 2593
Joined: 24 Oct 2007 14:38
Location: Erimi, Limassol, Cyprus
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Re: cgt calculation

Post by Nigel Howarth »

Jackjack336 wrote: 09 Dec 2020 02:43My estate agent has recommended a lawyer to act on my behalf as he is both quick and competitively priced. I have already agreed to this!

The lawyer has also asked for me to sign a doc that gives him power of attorney to act on my behalf. Is this a usual occurrence?
If you cannot be here to organise the sale yourself you will need to appoint someone to act as your Power of Attorney.

But as you may infer from Pan's post some lawyers abuse their power. I suggest you get a couple of competitive quotes from the lawyers on the list published by the UK Foreign & Commonwealth Office.

You will need to get any PoA certified in the presence of a Certifying Officer. The lawyer will prepare the PoA, which you should check thoroughly, and send it to you. To get it certified you will need to visit the Cyprus High Commission in London or one of the Honorary Consulates taking your passport with you.

The Certifying Officer will check your identity and witness your signature on the PoA. Once certified you send the PoA to the lawyer.

As for claiming the maximum CGT allowance, it's very unlikely.

Could you PM me the name of the lawyer and I'll see if he/she is on my 'black list'.

Cheers,
Nigel Howarth
Independent information & advice for Cyprus property buyers
Contact Nigel Howarth
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