Is tax due on joint bequest?

Q: On the death of our father, my sister and I inherited the family home as joint tenants (joint owners)

Q: On the death of our father, my sister and I inherited the family home as joint tenants (joint owners). The property was my sister's principal private residence before our father died, and this continues to be the case. The property is not my principal private residence.

I live more than 2km from the property. I receive no rent in respect of the property. The legislation (Local Government (Charges) Act, 2009) defines an owner as “a person . . . who . . . is entitled to receive the rent of the property or, where the property is not let, would be so entitled if it were so let”.

This seems to imply that the non-principal private residence (NPPR) tax applies to a property that is or can be rented. In my case the property is not a rental property, is not a holiday home and is not vacant. The property is not, and cannot be, rented (as it is my sister’s principal private residence and she is a joint owner of the property), and I am therefore not entitled to receive rent.

I don’t think I am liable to pay the tax. I would appreciate your advice.

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Ms GS, e-mail

AThe NPPR charge has been the subject of substantial reader interest in recent weeks – in part, no doubt, because the deadline for payment of the charge was the end of September. A one-month extension to the end of October was granted before councils begin pursuing second-home owners for payment as well as interest and penalties. That means people now have just over one week to pay the charge – €200 this year.

However, not everyone is liable to the charge, and you are one of the groups that will be able to avail of an exemption. The Department of the Environment and Dublin City Council have confirmed for me that no charge is liable in a case where there is more than one owner of a property and it is the principal private residence (main home) to any one of the owners.

Even though the house may be a second property for some owners, such as yourself, as long as your sister uses it as her main home, the NPPR charge will not arise. The 2km element applies only to granny flats and is not relevant in this instance.

Q My son resides in America but owns a property in Ireland. Is he obliged to pay this charge?

Mr RH, e-mail

AWhile people can avoid exposure to Irish income tax if they are tax resident in another jurisdiction, property taxes tend to be paid in the jurisdiction in which the property is based.

That is also the case when it comes to the non-principal private residence charge. Assuming your son’s Irish property is not his only, or main, home, he will be liable to the €200 charge, payable to his local council or via the www.nppr.ie website.

Q I own one property in the State, which is an apartment in the city centre. It is my only home and the only private residence that I own in the State. My son owns a property in the suburbs and he has now emigrated. My wife and I have moved into our son’s property because it is more suitable for our present needs.

This is a temporary arrangement until he returns home. While we live in our son’s property, we let our apartment in the city centre.

Is our apartment liable for the NPPR charge?

Mr MF, Dublin

AMy understanding is that you are not liable to the charge, but your son might be.

Your city centre apartment has been your principal private residence. Even if you did own property abroad, you are clearly not using any foreign property as a main home.

You do not own your son’s house in the suburbs and therefore cannot be held liable for the NPPR charge in respect of that property either. However, if your son has another property in the country to which he has emigrated, he will be liable to the €200 charge on his Irish property where you now reside.

For your part, obviously, you will be liable to income tax on the rental income from your apartment.

Writing off forfeited deposit against CGT

Q I have a CGT liability on a property I sold in January of this year. In addition, I have forfeited a deposit on a property that I did not close on. My accountant has advised me that I am unable to write off this loss against my capital gain. Can you please advise if this is the correct information.

Mr JB, e-mail

AThe capital gains tax (CGT) regime allows people to offset capital losses against gains made in the same year. If the loss exceeds any gain, it is carried forward and available against gains in successive years until it is fully offset.

However, this does not appear to rank as a capital loss. You have simply forfeited a deposit. No asset has been disposed of because you never actually owned the property on which the deposit was put down.

Clearly, you do have a gain from the sale of the property early in the year, and the October 31st deadline for filing your CGT return and paying the tax due is looming.

Please send your queries to Dominic Coyle, QA, The Irish Times, 24-28 Tara Street, Dublin 2 or by e-mail to dcoyle@irishtimes.com. This column is a reader service and is not intended to replace professional advice. Due to the volume of mail, there may be a delay in answering questions. All suitable queries will be answered through the columns of the newspaper. No personal correspondence will be entered into.

Dominic Coyle

Dominic Coyle

Dominic Coyle is Deputy Business Editor of The Irish Times