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Thanks for the feedback Matt! Appreciate the confirmation.
However, I have to say I was a bit surprised by ATO’s response?!I guess it depends on the timing of when your partner legally became your wife (de facto law applies). If it is just recent, then ATO’s response would be correct.
The ATO treats a couple as one unit for many of their CGT exemptions and discounts.
I would imagine one couple (when they became a couple), can only elect one property to be their main residence (or if you choose to have different main resident, you apportion the interest) at any one timeThe 6 year CGT exemption rule only applies if the property is in fact elected to be your partner’s main resident.
When your partner became your wife, she will have “interest” in two PPORs, and you and your spouse must either:
a, choose one of the homes as the main residence for both of you for the period, or
b, nominate the different homes as your main residences for the period.In that case, no matter how you and your wife choose, some CGT will need to be paid when CGT events (selling the properties) occurs to both properties.
From a tax payer’s point of view, when the ATO does an audit on your tax returns, they can probably identify a couple having two PPOR by linking the spouse details, even when the two properties are in separate names.
However, at the end of the day, ATO has the discretion.
So it was very wise of you to have obtained an answer from ATO.My recommendation is that you get that in writing or a private ruling!
Good luck with the pillow talk
KennySC,
Just a point of clairifcation. There are several types of ATO rulings, but mainly Public and Private.
You can only rely on the Public Rulings (not other people’s Private Rulings or Product Rulings). Public Rulings come in the form of Taxation Rulings and Taxation Determinations. Public Rulings like a the one attached above are binding to the ATO.Private Rulings will only be binding to the ATO if you were the applicant and full facts were given.
As one famous fictitious bug hero’s uncle once said: “Great power comes great responsibility!”
I hope to have your conundrum somedayThanks Michael for the compliments.
Sorry all for going off the tangent from the original post!
KennyStumpCam,
It sounds like the ATO has made an allowance for investors to refinance their mixed purpose account to separate income producing portion and private portion. (note that this only applies if you refinance the entire subaccount) If I were you, I would show the Tax Ruling to your accountant and get him to investigate further (and possibly obtain a Private Ruling from the ATO). Note also, the link shown is a Tax Ruling, so you will not be penalised by the ATO for relying on the judgement if your situation is similar.
As Michael suggested, it’s best that you get it from the horse’s mouth. (though I have to say, ATO is not known for their timely service when it comes to complex issues)I guess the title speaks for itself! They are common mistakes for a reason!
There is no doubt that sometimes it’s an onerous task to keep track of all the expenses that are tax deductible or otherwise. However, in the case you mentioned, the Body Corporate is responsible for producing monthly statements as well as the backing documents (tax invoices etc):
http://www.justice.qld.gov.au/files/CourtsAndTribunals/3.4_-_Administrative_fund_and_sinking_fund.pdf
“Reconciliation statements (SM s149)
If a body corporate manager is authorised to administer the body corporate’s administrative or sinking fund or if the body corporate decides by ordinary resolution that reconciliation statements must be prepared, a statement must be prepared within 21 days after the last day of each month for each account kept for the fund showing the reconciliation of:
? the financial institution statement showing amounts paid into and from the account during the month;
? invoices and other documents showing payments into and from the account during the month.
The reconciliation statement must be prepared by a body corporate manager who is authorised to administer the fund or otherwise the treasurer.”Note the document maybe Qld specific.
No pain no gain eh?
Kenny
