hi,
I currently have an investment home, valued around $650,000.
Is it possible for me to sell or transfer this property to my son for below market value (E.g. $500,000) in order for him to reduce the stamp duty that he needs to pay? similarly, it will reduce the amount of CGT I have to pay.
Is this possible?
Which way is better? transfer or sale?Also, what other things do I need to consider? what happens if he sells the property, worst case, in 6 months after purchsing it from me?
kind regards
Stamp duty is calculated at market value.
Your accountant is probably in the best position to advise whether reduced cgt would be payable if you sold below market to your son or whether you would pay cgt on the market value or if it could be seen to be defrauding the ATO in an effort to avoid paying cgt.
If your son then onsells (at a great profit within 12 months) he will be up for CGT on the full value of the gain at his marginal rate of tax. If he sells outside of the 12 months, then the cgt is reduced by 50%.
You can transfer it at any amount, but both stamp duty and CGT will be applicable at market rates.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
thank you for your response.
I am a little confused as I thought my son does not need to pay CGT because it will be his primary home after I sell it to him?please advise..
Scott No Mates wrote:Stamp duty is calculated at market value.Your accountant is probably in the best position to advise whether reduced cgt would be payable if you sold below market to your son or whether you would pay cgt on the market value or if it could be seen to be defrauding the ATO in an effort to avoid paying cgt.
If your son then onsells (at a great profit within 12 months) he will be up for CGT on the full value of the gain at his marginal rate of tax. If he sells outside of the 12 months, then the cgt is reduced by 50%.
What about you though?
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
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