My brother and I plan to sell our houses jointly. Where do we stand in terms of CGT?

March 2014


My brother and I jointly own a home in Cork since the mid-1990s. There is no mortgage. He lives there full-time and I usually spend about three to four months a year there, the rest of the time travelling and teaching English abroad. I am planning to spend most of my time in Ireland when I have my own home purchased. We share the costs equally. The utility bills are in individual names, some in his with the rest in my name. Neither of us has another home.

We are now planning to sell and purchase individual homes with the proceeds as he is planning to marry. Do either/both of us have a capital gains tax liability on the sale proceeds? What can we legally do to minimise/avoid same if applicable. How is it calculated? Would we get any allowance for immediately reinvesting in individual homes?


You should always obtain specialist tax advice but, in brief, the house is your brother’s principal private residence (PPR) and he should benefit from the relevant capital gains tax (CGT) exemption.

We assume that there is no development value in the sale price; this would require computation of the residential versus development portions of the sale price.

Your position is slightly more complicated. There are rules governing how long you can live away from the PPR, for example, a period of up to 12 months immediately before the end of the period of ownership is treated as a period of occupation even though you may not have been actually living in it during that period.

There are other permitted circumstances for living away from the house that do not invalidate its status as your PPR, such as time when you worked outside the State which appears to apply to your case.

Beware of the stricter conditions that exist for foreign employment than for an Irish employment, however. If you work abroad, to qualify as a deemed period of occupation it must be a period “throughout which the individual worked in an employment or office”.

Your case involves working and travelling which is problematic. Most advisers assume that the individual has preserved their PPR relief for the time spent working but lose it for the time spent travelling. An alternative view is that the individual would not preserve any of their PPR relief as they were not working throughout the entire period abroad.

You will need to show clearly that you were working for most of the time you were overseas and will need evidence of this. Details of how CGT is calculated are available on

Reinvesting in another home is not a relevant issue. You can buy another house (your next PPR), sell it in the future and avail of CGT exemption once you comply with the requirements. Talk to your accountant or tax adviser about how best to handle a CGT exemption claim with reference to your time overseas.

Simon Stokes is chair of the residential property professional group of the Society of Chartered Surveyors Ireland