Capital Gains and LTD Companies

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Cremin
Participant
@cremin
Join Date: 2003
Post Count: 105
August 4, 2003 - 7:30 pm
HELP HELP HELP!!
We are working out an action plan for a renovating business that will basically mean we buy a house, renovate it as cheaply but as nicely as possible and sell it on as a profit.
Our question is about capital gains. How many houses are you allowed to renovated and sell under your own name without incurring capital gains tax or would we be better off starting a ltd company where the tax is one set rate? Oh yeah, we would be living in the house as we renovate it so it would be our primary place of residency to start with. Eventually we will have our own place.
Anyone that can help decipher capital gains or any interesting info about ltd companies would be greatly appreciated.
Cheers.
Cremo.[]
Here for a good time not a long time, just do it!.
Red
Member
@red
Join Date: 2002
Post Count: 20
August 4, 2003 - 8:03 pm
Cremin,
There would be no cap. gain as it would be your primary place of residency. But their may be a time limit that is to say if you did the reno in 4 weeks then sold the tax man would call any profit income and tax the lot…..
Companies have no Cap. gains reductions.
Ross.
Terryw
Participant
@terryw
Join Date: 2001
Post Count: 16,213
August 5, 2003 - 2:33 am
As far as I am aware there are no fixed rules with doing this. But at some stage, the ATO will deem you to be operating a business and you will have to pay tax, even if you are living in the houses. I have heard it suggested that even a couple per year could raise the suspicion of the ATO.
You can make some really good money doing this tho!
Terryw
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Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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