If person A and person B each own 50% of the property. Once the property is sold it is split into 3 between person A, B and C.
Will person C have to pay tax on their share of the money they've received, even though their name was not on the title of the property?
When is tax charged? Once the property is sold (taken out automatically) or once a person lodges their tax return?
If person B is in a de facto relationship, will their partner also have to pay tax? Or will their partner be unaffected?
Also, if the house was built by owner builders 7 years ago, and they no longer have the receipts, how will they work out the value of the property (when they go to work out the profit)?
not_so_lucky wrote:If person A and person B each own 50% of the property. Once the property is sold it is split into 3 between person A, B and C.Will person C have to pay tax on their share of the money they've received, even though their name was not on the title of the property?
No, the tax is payable by the owners of the property, which in this case is A and B. A and B can do whatever they like with the proceeds – as long as they pay whatever tax is due!
not_so_lucky wrote:When is tax charged? Once the property is sold (taken out automatically) or once a person lodges their tax return?The sale is declared on the tax return, and tax is paid after the tax return is lodged.
not_so_lucky wrote:If person B is in a de facto relationship, will their partner also have to pay tax? Or will their partner be unaffected?No, as B is the owner, so the sale would be shown in B's tax return.
not_so_lucky wrote:Also, if the house was built by owner builders 7 years ago, and they no longer have the receipts, how will they work out the value of the property (when they go to work out the profit)?Hmmm. Firstly, you would (I hope) have a settlement statement for the purchase of the land? This forms part of the cost. Do you have any records of what was paid? This could be an issue, because you don't have any proof of the cost. You could try and see if your suppliers have any records, but seeing as though it's 7 years ago, I doubt it.
Thanks so much for all that Dan42!!!
Dan42 wrote:not_so_lucky wrote:If person A and person B each own 50% of the property. Once the property is sold it is split into 3 between person A, B and C.Will person C have to pay tax on their share of the money they've received, even though their name was not on the title of the property?
No, the tax is payable by the owners of the property, which in this case is A and B. A and B can do whatever they like with the proceeds – as long as they pay whatever tax is due!
So they don't have to pay tax on inheritance or anything like that?
Dan42 wrote:not_so_lucky wrote:Also, if the house was built by owner builders 7 years ago, and they no longer have the receipts, how will they work out the value of the property (when they go to work out the profit)?Hmmm. Firstly, you would (I hope) have a settlement statement for the purchase of the land? This forms part of the cost. Do you have any records of what was paid? This could be an issue, because you don't have any proof of the cost. You could try and see if your suppliers have any records, but seeing as though it's 7 years ago, I doubt it.
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We've got a settlement statement, but not receipts. We also did a lot of the work ourselves.
I thought they get valuetors to work out the estimate. So basically, anything we did ourselves and/or don't have receipts for will not count as a "cost" or whatever the proper term is?Sorry to hijack the topic. Just had my own cgt question.
A neighbour and I have decided to subdivide our two blocks to create 3 blocks. We will both be keeping our original blocks, and selling the new one. We have both had our places for several years. Will we be subject to cgt on the block we sell?
Thanks for any help.
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