CGT CALCULATION on Lisbon flat sale - want to avoid an error
 

Thanks in advance if you can help. I've been helped previously with this but now the property is under offer (not signed just yet) so the actual figures are in - i want to make sure of no mistakes.
Context:
Prospective sale of 1 property (Lisbon)
3 equal share owners - who inherited from a parent. All 3 owners live / pay tax in the UK.
The VPT on the property is 76,000 euros
The selling (transaction) price is 850,000 euros
The estate agents fee is 6% of the sale price (yes, high, even for Portugal), we calculate this to be 51,000 and we will ensure that expense is declared properly in the Deed, (to have it deducted for CGT purposes).
I use a quite simple method myself, having consulted here once before, to calculate 2 things:
A) the sum, (per person) that will become taxable under CGT in Portugal
B) the CGT total (per person) that will be deducted from A, to leave us with a "final compensation total", in Euros, per person , which I will call "C".
Can anyone, with this basic info, predict reasonably accurately what A and B should be?
Or if there is some further calculation that needs to be accounted for, that remains unmentioned? Other sundry expenses / costs linked with the property are minimal enough to put aside.
It would be so helpful to understand the sequence in which the deductions are made / calculated if possible.
I'm also wondering if people think the three vendors can realistically use just one solictor for this transaction, or is it not advisable? amicable relations between the 3.
many many thanks B matic
i'm in a far flung part of the world (for once!) grappling with a sudden offer ... rusty on the details despite re-reading old thread (s)

Re: CGT CALCULATION on Lisbon flat sale - want to avoid an error
 

As the cg is added to each individuals ww income for that year ,each of them will have a different liability

I think

I know ,otoh, you definitely need an accountant

Re: CGT CALCULATION on Lisbon flat sale - want to avoid an error
 

You need professional advice before completing the sale but have a look at this article. I'm not linked to nor recommending this particular company:
https://www.portutax.com/news/inheri...on-resident-57

Re: CGT CALCULATION on Lisbon flat sale - want to avoid an error
 

Are you named executor of estate ? Have you got probate?
If you are, 3 other "owners" have nothing to do with sale.
Executor will hire solicitor, accountant and deal with all business about sale.

Once sale is complete, PT tax paid, funds will be distribute to 3 "owners" by executor. Amount will very likely be way below IHT tax level.

Re: CGT CALCULATION on Lisbon flat sale - want to avoid an error
 

Apologies for delay replying I had been in transit last week, specifically the days after this post & finally some spare time to thank the contributors here.
EU flag - thanks reply, probate was several years ago now, and isn't a factor. I assume "owners" is in repeated quotation marks due to me not being clear enough, but as I say this isn't probate related.
many thanks in any case , and NSG66. and Dingg.
thanks again and I quickly want to apologise to the whole forum for writing over-long questions that somehow, aren't sufficient despite being too long. just a bad writer in this situation but I do appreciate any reply.

Re: CGT CALCULATION on Lisbon flat sale - want to avoid an error
 

just to ask again - in a standard property sale , all 3 parties equal shares are not in any dispute etc , nothing unduly complicated albeit 3 parties selling, is using one solicitor for the whole transaction, for all 3 parties, advisable ? I know everyone will have their own view, but what is yours?
Also: I have been told to expect to pay a solicitor c. 1% of "the transaction ", but I am very keen to know, in a sale with 3 vendors, if I engage my own individual solicitor, which I _would_ prefer, is the solicitor likely to quote me 1% of the entire transaction price, or would it possibly be 1% of only the "part" (e.g., 1/3rd of transaction price) which pertains to my share in the property?
really hoping this narrow question has been written clearly enough, as my track record here is terrible.
many many thanks if anyone can help with those 2 further queries

Re: CGT CALCULATION on Lisbon flat sale - want to avoid an error
 

Surely the essential question is - who is the executor. If no executor was appointed in the will, then in Portugal the senior member of the family is usually recognised as an executor. The executor is the one who does all this - with the aid of a Portuguese solicitor chosen by the executor and in particular a Notary. So the calculation of capital gains is worked out with the solicitor and reported to the Notary, and involves any legitimate costs (eg selling agent commission, solicitor fees, major building costs if invoiced and invoices can be produced, initial purchase fees when deceased bought the property .... etc) which are subtracted from the purchase price, to give the (expected) profit ie capital gain at the sale. Once this is sorted out and the government informed by the Notary, the proceeds of the sale can be released (equivalent of UK probate) as per the will. In your case divided into three. Tax at 10% is paid (in lieu of what in UK would be IHT) - like a Stamp Tax. Then comes the question of personal taxation on the three recipients who as non-residents of PT need probably to consult their own solicitors as to their situation. As I understand it there is no personal taxation in Portugal on inheritance ....
So in a nutshell, the solicitor would be hired by the executor to sort out the will and the inheritance for the deceased's estate. So one solicitor for the job. The inheritors are not involved in this part, only in receiving eventually the inheritance. So the solicitor's fees would be related to the work done for the estate rather than any or all of the inheritors. It may be possible in a simple situation to deal directly as Executor with a Notary and not need the advice of a solicitor - the solicitor is there to help the executor get things sorted out. The Notary is an official who transmits everything to the government - there is a charge there too for the service. Do not confuse solicitor and notary ... A good notary will also suggest the deductions which can be made but I believe the executor would be responsible for providing the amounts involved.

Re: CGT CALCULATION on Lisbon flat sale - want to avoid an error
 

I don't think this is completely correct under the circumstances as I understand them.

The inheritance was dealt with some time ago and there was no stamp duty due as the 3 beneficiaries of the will are the children of the deceased, who jointly inherited and kept the property. They are now at a point where they have agreed to sell the property, hence CGT coming into the equation. Executor, estate etc are now immaterial. It's a straight sale of a jointly-owned property. The only bearing the property having been inherited has on the matter is in the way the gain will be calculated - ie using the VPT at the date of the death as the acquisition price.

Re: CGT CALCULATION on Lisbon flat sale - want to avoid an error
 

Ahh - caught me behind the barn door there - OK catching up rapidly. OP will be glad of your clarification.

Re: CGT CALCULATION on Lisbon flat sale - want to avoid an error
 

Arquero thanks. My OP up top was bad, as the replies are leading back to probate. I've given up on trying to check CGT costs- the sale has been agreed now.
Wondering if its "irregular" for 3 vendors (in regular contact with each other anyway) to use 1 solictor for the transaction , or if it is perfectly feasible.
i would prefer my own solicitor - but worrying about likely cost - as c.1% of 850k is a very significant sum, (compared to c.1% of 283k, eg my 1/3rd share)

Re: CGT CALCULATION on Lisbon flat sale - want to avoid an error
 

i forgot to thank Red Eric for the clarification, thanks!

Re: CGT CALCULATION on Lisbon flat sale - want to avoid an error
 

Could you not get an update VPT from the Camara??

Re: CGT CALCULATION on Lisbon flat sale - want to avoid an error
 

What purpose might that serve? :unsure:

Re: CGT CALCULATION on Lisbon flat sale - want to avoid an error
 

Its true in this case it would serve no purpose. But in general the VPT is automatically increased every 3 years, but an owner can request an re appraisal of the VPT as well.
I would have thought for an older property with low VPT, it might be worth doing pre death, especially as it costs nothing to do it. Yes it would increase the IMI.