Hi,
My ex-husband and I divorced in 2002 and haven't as yet separated our assets. We were not advised that we should do so within the first 12 months of divorcing to avoid paying stamp duty. That aside we plan to divide the assets this year. What CGT implications will there be for us? One property – which is to be transferred to my name is 100% investment property. The other property was our PPOR for a number of years but we have both since moved away and it is now an IP. This property will be transferred into my ex's name.
Thank you for taking the time to read this. Any advise I receive will be appreciated.
Kind regards,
DiHi Diane
An asset transferred as a result of marriage breakdown can be 'rolled-over' for CGT purposes, until the asset is ultimately sold. This rollover can only be accessed if there is a family court order, or a binding financial agreement between yourself and your ex-spouse.
But bear in mind, it is not an exemption, but a rollover. It means the the spouse selling his/her share of the asset does not have to pay CGT, but it is ultimately paid by the spouse who receives the transfer.
Also, the CGT payable on the ultimate sale is based on the cost price of the asset, not the amount paid to the ex-spouse.
eg House Purchased $200,000 1/7/02
Marriage breakdown – transfer of asset $175,000 1/7/06 (paid for half share)
House Sold $420,000 1/7/09The capital gain is $220,000 ($420,000 sale less $200,000 cost)
Hi Dan42,
I wasn't aware that was an option. Thank you.
Kind regards,
Di
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