All Topics / Help Needed! / CGT and my options…

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  • Profile photo of scottsscotts
    Member
    @scotts
    Join Date: 2009
    Post Count: 63
    August 6, 2010 - 3:03 am

    Okay so here's the scenario..

    Bought a house, which I'm planning to build in the backyard.

    I will most likely not be moving into the front house, so I will be paying CGT on it ,which i plan to sell as soon as the subdivide is done.

    For the rear property my options would be:

    Move straight in and sell after 12months (which should make it exempt from CGT?)
    Put the property under the wifes name (how earns much sell) and sell after 12months and with less CGT (can I do with without stamp or CGT on the land?)
    Put the property into a family trust, can i then spread the CGT across wife and my parents (no longer working) or does the trust have to pay the CGT? with this option i would have to sell the land, in which case CGT would occur.

    So it looks like moving in would be the best option, 2nd to the putting the new property into the wifes name?

    thanks

    Scott

    Profile photo of propertunitypropertunity
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    @propertunity
    Join Date: 2008
    Post Count: 136
    August 6, 2010 - 5:31 am

    You need to take professional accounting advice.
    In the meanwhile read the free booklet  "How not to be a property developer" on http://www.bantacs.com.au

    Profile photo of scottsscotts
    Member
    @scotts
    Join Date: 2009
    Post Count: 63
    August 6, 2010 - 5:37 am

    i was planning on get professional accounting advice, however i thought i'd float the idea here first…

    Profile photo of quickchickquickchick
    Member
    @quickchick
    Join Date: 2004
    Post Count: 168
    August 6, 2010 - 5:46 am

    Hi Scott,

    Best approach to this deal would have been to see an accountant BEFORE you bought the property, set up a trust if advised (only takes your accountant about a week), then buy the property in the desired entity. Now, if you plan to change ownership, I believe that you will have to pay the full stamp duty price. Again!

    (Unless you are in a position to be exempt from stamp duty, but I don't think a trust can be.)

    I'm not clear whether you plan to move into the new house or not.

    quickchick

    Profile photo of scottsscotts
    Member
    @scotts
    Join Date: 2009
    Post Count: 63
    August 6, 2010 - 6:13 am

    Yes I should have seen an accountant first, however this property come up and I didn't want to miss out.
    I'm considering moving into the house, have to discuss it more with the wife.

    Profile photo of quickchickquickchick
    Member
    @quickchick
    Join Date: 2004
    Post Count: 168
    August 6, 2010 - 7:06 am

    Try discussing it with your accountant before deciding whether to move in.
    May cost a couple of hundred bucks.
    May save up to tens of thousands.

    After your accountant"s advice, you'll be in a better position to decide which way to go.

    quickchick

Viewing 6 posts - 1 through 6 (of 6 total)

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