Australia Law
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Answered in 2 minutes by:
4/10/2012
Brisbane-Lawyer, Solicitor - Admitted 2005
Category: Australia Law
Satisfied Customers: 14,361
Experience: I did my law degree at the University of Queensland
VerifiedThe answer is yes, CGT will still be payable. However, it would be less than what it would otherwise be if you hadn't made it your residence.
Precisely how much you will have to pay is more a question for an accountant than a lawyer, but under the tax laws, you cannot avoid CGT by moving into an investment property and making it your residence.
If my answer has been helpful or informative, please press the Accept button. I am also able to answer further questions after accepting.
Precisely how much you will have to pay is more a question for an accountant than a lawyer, but under the tax laws, you cannot avoid CGT by moving into an investment property and making it your residence.
If my answer has been helpful or informative, please press the Accept button. I am also able to answer further questions after accepting.
Leon, Solicitor
Category: Australia Law
Satisfied Customers: 52,728
Experience: BEc Dip Ed, Dip Law (SAB) MTax (UNSW)
VerifiedGood Afternoon,
Because the property was transferred into your name in 2008 under family court orders the law says that the CGT event is rolled over and you are deemed to have been the sole owner of the property from the initial date of purchase.
At the time of their initial transfer no capital gains tax was paid by any party as there is no official CGT event.
When you became the owner because of the family Court orders, the taxation office deems that they you purchase the property on your own at the initial purchase date.
From the date the property became your principal place of residence you are not liable to pay capital gains tax and therefore it is apportionment between the period that you had it as an investment and the period it was your principal place of residence.
Here is a link that will explain further. Look under the heading Residence used for Income Producing Purposes.
http://www.afsd.com.au/article/aip/aip23a.htm
If you now sell the property you will pay capital gains tax on 50% of the profits and the other 50% is tax-free to you for the apportioned period.
Here is some information about CGT and the breakdown of marriage from the Australian taxation office for your attention.
http://www.ato.gov.au/individuals/PrintFriendly.aspx?ms=individuals&doc=/content/37174.htm
I hope this is of assistance and if so please click on the accept button.
I hope this is of assistance and if so please click on the accept button.
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