All Topics / The Treasure Chest / Tax’s & Simultaneous Closing

Viewing 4 posts - 1 through 4 (of 4 total)
  • Profile photo of striker1striker1
    Member
    @striker1
    Join Date: 2003
    Post Count: 1
    May 18, 2003 - 11:35 am

    Hi

    I have been told by a lawyer that according to WA law, even if I do a simultaneous close I must still take title of the property at closing even if it is for just 5 minutes.

    This obviously has tax consequences such as stamp duty and capital gains tax. I was wondering if anyone in WA or elsewhere faces similar arrangements with simultaneous closings and how they cope with its effect on their profits.

    Particularly if you are sandwiched in a lease/option between a landlord/seller and a tenant/buyer.

    Regards
    Brett

    Profile photo of williwilli
    Participant
    @willi
    Join Date: 2002
    Post Count: 186
    May 18, 2003 - 12:11 pm

    I actually have no idea if this would legally work and the concequences of it but wouldn’t it be possible to put a “and/or nominee” clause into the original purchase contract and then get them to simply assume the contract for your purchase price and just give to the difference as a kind of finders fee???

    Pete

    Profile photo of ADAD
    Participant
    @ad
    Join Date: 2002
    Post Count: 636
    May 19, 2003 - 1:20 pm

    In Qld you cannot do an and/or nominee clause and substitute someone along the way unless that person was originally intended to be the nominee prior to signing. A double stamp duty is payable (one for you one for them) and unfortunately that is the law. Wouold be nice to source a good deal and then Flip it on but the long way is slightly less profitable but a whole lot safer legally.

    Enjoy
    AD [:0)]
    (Andrew)

    “”Imagination is more important than knowledge. Knowledge is limited. Imagination encircles the world.”
    Albert Einstein

    Profile photo of TheGreyManTheGreyMan
    Member
    @thegreyman
    Join Date: 2002
    Post Count: 2
    May 19, 2003 - 2:40 pm

    Hi Stricker – if you have a sandwich Lease/Option, why are you buying the property to onsell? I’d have thought you would be selling your Option-to-buy only. You never actually take title of the property. CGT would be paid on the profit you make from selling the option, and I think (but am not sure) that there is stamp duty on the option also (eg you secure IP purchase for 100K, sell option to TB for 30K, you pay SD on the 30K option, and tax on the 30K profit minus your option-fee costs). Your TB will be taking title (and their SD will be based on the purchase price of the IP – 100K).

    I would be looking for a second (and maybe third!) legal opinion.
    Hope this helps
    ShaunW

Viewing 4 posts - 1 through 4 (of 4 total)

The topic ‘Tax’s & Simultaneous Closing’ is closed to new replies.