CGT - Inherited Property - PropertyInvesting.com

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LConnor
Member
@lconnor
Join Date: 2012
Post Count: 7
September 18, 2012 - 12:04 pm
I have inherited a property in a will, I understand that the property fits the requirements to be exempt from CGT for a period of 2 years after I acquire the property. IF I choose to sell the property after the 2 year exemption period, what percentage of CGT will I be subject to and how will that be assessed, its a very confusing area. thank you
Derek
Member
@derek
Join Date: 2004
Post Count: 3,544
September 18, 2012 - 12:55 pm
Not an accountant so seek expert advice,
If the property you inherited was someone else's PPOR you have 12 months to sell before you start incurring CGT pn the property, A valuer can determine the value of the property at the time you took ownership.
If the property was an investment property then you will be liable for CGT from date the property was first purchased by the original owners.
The ATO website will have documents explaining much of this. Recommend you do a search of their website.
Terryw
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@terryw
Join Date: 2001
Post Count: 16,213
September 18, 2012 - 1:03 pm
The answer will depend on many things.
Was it the main residence of the deceased? Was it pre 1985 property? Is it your main residence? Do you inherit via a trust? etc
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
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Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
LConnor
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@lconnor
Join Date: 2012
Post Count: 7
September 18, 2012 - 1:06 pm
Great thank you. It was the PPOR of a family member.
LConnor
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@lconnor
Join Date: 2012
Post Count: 7
September 18, 2012 - 1:10 pm
Thanks again. The property is pre-85 and is not my PPOR it was my grans PPOR.
LConnor
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@lconnor
Join Date: 2012
Post Count: 7
September 18, 2012 - 1:12 pm
No trust involved.
Terryw
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@terryw
Join Date: 2001
Post Count: 16,213
September 18, 2012 - 1:15 pm
That changes things The cost base will be the market value at the date of death.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email Me
Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
LConnor
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@lconnor
Join Date: 2012
Post Count: 7
September 18, 2012 - 1:37 pm
Thanks again. The property was never valued at the time of death. The value placed on the probate came from a LTO online search I suspect. I think I best get the property valued.
Derek
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@derek
Join Date: 2004
Post Count: 3,544
September 19, 2012 - 1:16 am
Terryw wrote:
That changes things The cost base will be the market value at the date of death.
Is that because property was bought pre-1985?
Derek
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@derek
Join Date: 2004
Post Count: 3,544
September 19, 2012 - 1:20 am
Derek wrote:
If the property you inherited was someone else's PPOR you have 12 months to sell before you start incurring CGT pn the property, A valuer can determine the value of the property at the time you took ownership.
PS Should be 2 yrs
Terryw
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@terryw
Join Date: 2001
Post Count: 16,213
September 19, 2012 - 10:12 pm
Derek wrote:
Terryw wrote:
That changes things The cost base will be the market value at the date of death.
Is that because property was bought pre-1985?
Yep. see item 4 in s128-15(4) ITAA
http://www.austlii.edu.au/au/legis/cth/consol_act/itaa1997240/s128.15.html
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email Me
Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Derek
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@derek
Join Date: 2004
Post Count: 3,544
September 19, 2012 - 11:15 pm
Thanks for clarifying that – geez, who would be an accountant?