Buying from Father in law, pension problems and solutions

Given that he never questioned how it would affect his pension, probably want to check instead of assuming.

 

I am guessing there is no CGT because the rule states

Net capital gain
Your net capital gain is calculated using the following formula:

A − B − C

Where:

A is your total capital gains for the year (including those distributed by a managed fund or trust)

B is your total capital losses (including any net capital losses from previous years)

C is any CGT discount and small business CGT concessions you're entitled to

Net capital loss
If your total capital losses for the year exceed your total capital gains, your net capital loss is calculated using the following formula:

A − B

Where:

A is your total capital losses (including any net capital losses from previous years)

B is your total capital gains for the year (including those distributed by a managed fund or trust)

You can't deduct a net capital loss directly from your income, but you can carry it forward and deduct it from capital gains in later income years.

There is no time limit on how long you can carry forward a net capital loss.
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He has made a loss every year for the last 17 years, that will all be carried forward so its more than conceivable there is no CGT

 

But did he have negative taxable income for 17 years?

 

Well i dont really want to ask him about his personal finances, that is why i am having to make assumptions. My main assumption is that he has seen a competent accountant, of which he assures me is the case and the accountant has told him he will have a capitol loss of $27000k

 

Accountants only know as much as the client tells them. If the client doesnt know something.....

 

What is the value now and when purchased?

 

was purchased in 2002 for 110,000 , valuation done last week is $340,000. Remember that difference is immediately halved because he has owned it for more than 12 months, and he has made a loss every year on it also that carries over - it is also joint owned with his wife- halving it again.

 

Losses if any are applied before the 50% discount.

Rent? Who paid the bills? Did they have other income, presumably the fil works?

You need to know what theyve done on their tax returns.

 

I can't imagine there would be no gain on this.
I also think you might be misunderstanding the loss concept as well