Thanks so much Jo!
Where I stand in relation to CGT is sooooo much clearer to me now, thanks for your help!
You obviously have alot of experience in this area and I really appreciate you taking the time to help me.
Originally posted by Monopoly:Originally posted by Terryw:I think you could get away without paying CGT this time, by claiming you last place as the main residence. But if you ever sell the current main residence, you could not claim it as your main residence from the date of purchase until you sold the investment. Can only have one main residence at one time – except for a 6 month cross over period.
How so Terry, if the current PPOR is the claimed main residence??? Had it (the current) not been the case, or less than 6 months (cross over) this may have been possible, but I cannot see HOW they can be exempt.
Cheers,
Jo
Hi Jo
I was assuming that pasandbec would not be claiming the current main property as their main resdience for any overlapping ownership period.
Terryw
Discover Home Loans
Mortgage Broker
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
Originally posted by pasandbec:
You obviously have alot of experience in this area
Sadly to the tune of almost 250,000 so yes I guess I have more than “a little” [blush2] knowledge of CGT.[bawl]
and I really appreciate you taking the time to help me.
You are MOST WELCOME!!! I do so hope that you can manage to repay the absolute minimum. [biggrin]Cheers,
Jo
Originally posted by Terryw:
Hi JoI was assuming that pasandbec would not be claiming the current main property as their main resdience for any overlapping ownership period.
Fair enough, Terry. Under those circumstances, yes you would have been spot on, especially mentioning the 6 month cross over period which in my haste, I omitted.
Many thanks,
Jo
Hmmmm,
Terry, Jo – I am starting to get a little confused again LOL
Deary me!
Pasandbec,
Don’t be. The 6 month cross over is a period of time in which you are allowed to have more than one main residence. Often this is for people who say, sell their PPOR and are awaiting the settlement of their new PPOR, in which case they are technically claiming 2 PPORs.
Cheers,
Jo
Monopoly and others,
I’d really appreciate if you took a look at this (response from this CGT specialist company I emailed) and see what you think….thanks.
_________________________________________
As you have established both properties as your main residence and moved in as soon as practicably possible, you have a choice as to what property was your main residence for CGT purposes, so long as you do not claim another property as your main residence for the same period of time.
Therefore, the ACT property (Property A) was your main residence from October 2002 to August 2004 (even though rented from Sept 2003 as you have not claimed another residence as your main residence as you were renting).
Option 1:
Property A remains main residence for CGT purposes (for up to October 2008) under absentee owner 6 year rule with NO Capital Gains Tax payable on sale of Property A. HOWEVER the property you are currently living (Property
will be subject to CGT as it would be regarded as non-main residence from August 2004 (even though you are living in it) until you sold Property A.Option 2:
Property A main residence from October 2002 until August 2004 and non-main residence from August 2004 until sold (CGT payable) AND Property B CGT exempt.
The choice of selecting the main residence for what period is made when either one of the properties is sold.
Summary:
Sell Property A with NO CGT payable BUT incur CGT upon sale of Property B OR Sell Property A and pay some CGT AND NO CGT liability to date on Property B.
To work out the CGT liability for non-main residence Property = (net sale price less gross cost price x (non-Main Residence period/total ownership period).
If Option 1 is chosen – relevant legislation would need to be produced under an ATO audit & record and calculation of current CGT liability on Property B needs to be kept.
If Option 2 was selected then relevant legislation & calculation would have to be made in the year of sale of Property A.
CGT Solutions can provide relevant legislation and calculations.
Regards
CGT Solutions
Original Message
From: pasbec [mailto:[email protected]]
Sent: Saturday, 5 March 2005 8:19 PM
To: CGT Solutions
Subject: Re: Capital Gains TaxHello,
Thanks for your reply. Please see my responses below in red.
Cheers,
Penny.
Original Message
From: CGT SolutionsTo: ‘pasbec’
Sent: Friday, March 04, 2005 7:52 AM
Subject: RE: Capital Gains Tax
Hi Penny
Thank you for your question regarding Capital Gains Tax (CGT).
In order to give you a solution to your question, we need to clarify some of the facts.
On what date (approximately) did you:
1. Purchase and move into the dwelling? August and October 2002, respectively.
2. Rent out the property? September 2003
3. Intend to sell the property? This year, hopefully April, May or June
When you moved out of the property and rented it out
1. Where did you live? (e.g. rented accommodation, overseas or another property you purchased) Rented until August 2004, when the house (we brought in June) settled and we could move in.
Have you (or your spouse) owned another property during the ownership of the ACT property? Yes, the one we currently live in.
Depending on the answers to the above questions, you may or may not be liable for CGT upon sale of the property.
___________________________________________Thank you for your question regarding Capital Gains Tax (CGT).
In order to give you a solution to your question, we need to clarify some of the facts.
On what date (approximately) did you:
· Purchase and move into the dwelling? August and October 2002, respectively.
· Rent out the property? September 2003
· Intend to sell the property? This year, hopefully April, May or June
When you moved out of the property and rented it out
· Where did you live? (e.g. rented accommodation, overseas or another property you purchased) Rented until August 2004, when the house (we brought in June) settled and we could move in.
Have you (or your spouse) owned another property during the ownership of the ACT property? Yes, the one we currently live in.
Depending on the answers to the above questions, you may or may not be liable for CGT upon sale of the property.
will be subject to CGT as it would be regarded as non-main residence from August 2004 (even though you are living in it) until you sold Property A.You must be logged in to reply to this topic. If you don't have an account, you can register here.
