All Topics / Creative Investing / Taxation on Wraps. What’s the go?

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  • Profile photo of Nathan HouareauNathan Houareau
    Participant
    @the-general
    Join Date: 2006
    Post Count: 107
    August 31, 2006 - 1:25 am

    Hello everyone,

    One of the recent posts that I have read stated that the ato has since taken a new perspective on taxing wraps.

    Does anyone have any info on their current methodologies for taxing wrap earnings?

    Cheers,

    Nathan

    Nathan Houareau
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    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024
    August 31, 2006 - 2:55 am

    Hi Nathan

    Pre 2000 wraps were taxed on the basis that the final installment price had been received on the date of possession when in fact it could have been a further 25 years until the final repayment was made.

    Thankfully the ATO saw sense and now the tax is payable using the emerging profit rule.

    Cheers

    Richard Taylor
    Residential & Commercial Finance Broker
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    Profile photo of Paul DobsonPaul Dobson
    Participant
    @pauldobson
    Join Date: 2003
    Post Count: 1,196
    August 31, 2006 - 1:18 pm

    Hi Nathan

    Richard is spot on. If you would like more information on this topic, click on:
    http://www.bantacs.com.au/booklets/Capital_Gains_Tax_Booklet.pdf
    and scroll down to the heading, “Wraps – vendor finance arrangements”.

    Good luck.

    Cheers, Paul

    Paul & Karen Dobson
    negative2positive
    Turn your negatively geared property into positive cashflow.
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    Talk to us about Wrap Training Joint Ventures.

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    Profile photo of TerrywTerryw
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    @terryw
    Join Date: 2001
    Post Count: 16,213
    September 3, 2006 - 3:49 am

    Paul, that’sa really good booklet isn’t it!

    Terryw
    Discover Home Loans
    Parramatta
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    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

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