hi
i have an investment property im selling in nsw.it cost 330000 in 2000 and i should receive min 600000.it was in joint names originally and then in 2001 i paid my business partner out 70000 and had it transferred just into my name.(which is a company acting trustee for a trust fund)does anyone know roughly how much tax i would be looking at once i sell.i believe you can claim costs such as pest reports,building work that was done as a result of some minor termite damage etc.
It will depend your cost base would be the value at the time it was transfered into the trust. You would have already paid the capital gains tax when you sold it to the trust.
CGT would depend on this transfer amount. lets assume is was $400,000 and there were $30,000 in legals, stamp duty etc. If you sell for $700,000, there would be a $300,000 gain less $30,000 in costs = $270,000. This would then be distributed to beneficaries who would then pay tax on this. If an individual, then may get the 50% discount, = $135,000. If on the top tax bracket, then maybe $67,500 in tax. But if you have many beneficaries, then the tax may be a lot lower.
I also think you would have to add back any depreciation claimed to the gain.ps I am not an accountant.
Terryw
Discover Home Loans
North Sydney
[email protected]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
Hi,
Terry has provided a good reply, so this may be somewhat overkill…
If you have not claimed those costs in the past then you may be able to add them to the cost base of the asset (you’ll need specific advice).
In repsect the amount of tax you’ll pay… first thing… I assume that your partner’s name is not on the title? If it is then there may be some legal complications.
Assuming it is not, and that you have it in a trust, here’s what happens:
1. The capital gain needs to be show in the trust tax return (i.e. after you have worked out the appropriate amount).
2. The gain is then distributed to the relevant beneficiaries, who are then taxed at their appropriate marginal tax rates. Provided the entity is an individual or super fund, then they should be able to access some form of the CGT discount. Distributions to a company do not qualify for the CGT discount.
May I suggest that you get some advice re: tax planning prior to selling, as a few hundred dollars spent now may save you several thousand in tax, and once you have sold then you lose some of your flexibility.
Best wishes,
Steve McKnight
**********
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**********Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
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