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Great News for Curran Futures Investors

Great News for Curran Futures Investors

 

INTRODUCTION

Here at Curran Futures we follow a core philosophy around investing, creating diversified, mostly passive, low cost portfolios for our clients.

Our due diligence processes are ongoing and comprehensive, with our Investment Committee meeting quarterly to review our offerings and the markets in general.

For some time now we have used Green REIT as a component of our Innovate Portfolios – most especially for direct cash (i.e. non-pension) investors. The was because we wanted:

  • Access to commercial property in a transparent and liquid model – a REIT
  • Low cost – an Irish fund with no transaction costs
  • Efficient Tax Treatment – as a share class, it is considered for CGT, the lowest of all for investors.

We have known for some time that Green REIT was to be sold (notwithstanding Paschal Donoghoe throwing in a last minute spanner on budget day!) and are delighted that it has now happened.

Our clients will generate profit on this fund of between 5 – 35% depending on when they invested (it’s all about time, not timing though…).

Nothing is ever certain when it comes to investing and the bad times can come suddenly. As such, we have no problems celebrating wins when we get them and are delighted that our clients are the beneficiaries of this most recent victory.

Ross Curran

Chief Investment Officer | Curran Futures

 

KEY TAX CONSIDERATIONS ON DISPOSAL OF GREEN REIT 

*Special thanks to Laura Lynch & Associates*

Q:        How do I calculate my capital gain on Green REIT?

A:        You deduct the “book cost” per your portfolio valuation from the sales proceeds received.  If you acquired your holding in Green REIT before it was transferred into your portfolio, then the original base cost that you paid for Green REIT must be used.  See Scenario 1 for a worked example.

 

Q:        How much can I receive tax free when I sell my Green REIT holding?

A:        Up to €1,270 per person is tax free.  If your portfolio is held jointly with your spouse / civil partner, you each get €1,270, or €2,540 in total, tax free. See Scenario 2 for a worked

If you make a gain of more than this amount on your disposal of Green REIT, the excess is subject to CGT at 33%.  See Scenario 1 for a worked example.

 

Q:        What if I have other capital gains in 2019?

A:        If you have made or will make other capital gains (eg on sale of shares or property) during 2019 that are also subject to CGT, these are taken into account in calculating how much CGT you have to pay and how much of your €1,270 annual exemption is already used up when calculating your tax liability on disposal of Green REIT.  See Scenario 3 for a worked example.

 

Q:        What if I have capital losses?

A:        If you made capital losses in earlier years or in 2019, these can be offset against the capital gain on disposal of Green REIT.  Losses on sale of exempt assets (e.g. the family home or certain assets bought between December 2011 and December 2014) or losses on transfers to connected parties will not shelter your Green REIT gain. 

Losses of a spouse / civil partner can be offset against the gains of the other spouse / civil partner.

Losses usually have to be realised (i.e. the asset sold) to be offset against your capital gains.  Talk to your tax advisor about making a negligible value claim on a worthless, unsold asset (eg Anglo shares) to shelter your Green REIT gain.

Losses made in a year after selling Green REIT will not shelter your gain.  Therefore, if you have assets in your portfolio that are worth less now than when you acquired them, you may wish to consider selling enough of them to shelter some or all of your Green REIT gain from tax.  You should consult with your tax advisor to work out the optimal number of loss-generating units to sell that will cover your Green REIT gain and also maximise use of your €1,270 annual exemption.  See Scenario 4 for a worked example.

 

Q:        When do I have to pay the tax?

A:        If the Green REIT disposal takes place before 30 November 2019, the capital gains tax must be paid to Revenue on or before 15 December 2019.

Tax on capital gains made in December 2019 must be paid to Revenue on or before 31 January 2020.

The tax should be paid using Revenue’s online system, ROS, particularly if you usually file and pay your taxes online.

If you are a PAYE worker and do not normally file tax returns, you should send your payment to Revenue along with a completed CGT Payslip A, which can be found here https://www.revenue.ie/en/gains-gifts-and-inheritance/documents/cgta.pdf.

 

Q:        When do I have to file a tax return to declare the gain?

A:        Although the tax is payable in December 2019, the disposal itself must be declared next year in your 2019 tax return.  This can be filed anytime after the year end up to 31 October 2020.  Self-employed people and those with non-PAYE income must file a Form 11.  The “capital gains” section of the return must be completed with your Green REIT disposal details.  PAYE workers, pensioners etc., i.e. people who do not usually file tax returns, must file a Form CG1 to declare the capital gain to Revenue.  As the tax will already have been paid to Revenue, no further payment is due to be paid with this return.

For a married couple / civil partnership who are taxed under joint assessment, the gains of each spouse / civil partner are disclosed in the one return, which is completed in the name of the assessable spouse / civil partner.

 

CGT ON GREEN REIT SCENARIOS; 

If you have any questions relating to the disposal of Green REIT shares, please get in touch 
 

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