CGT 6 year exemption

Discussion in 'Accounting & Tax' started by Elicon, 14th Jul, 2019.

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  1. Elicon

    Elicon Well-Known Member

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    Hi all,

    Have a question i am a little baffled by. My partner who is going to be my spouse moved in with me a few years ago and rented out her home she always lived in.

    Since then we purchased another property and moved in 6 months ago and I rented out my other property we initially lived in. New property is solely in my name.

    She is now looking at selling her investment property which was her initial PPOR and we are wondering will she be up for CGT on the sale as the 6 year rule cannot apply? If that is the case would it be applied similar to normal situations I.e cost base to sale or from when she moved out to live me?

    My accountant is on holidays so have no one else to go to.

    Thanks again.
     
  2. Terry_w

    Terry_w Well-Known Member Business Member

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    will she? It depends
    Spouses can only claim one property between them but you have a choice of which one to claim.
     
  3. Elicon

    Elicon Well-Known Member

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    Ok. I definitely don’t want to claim mine as it’s of higher value and more chance of a higher gain.

    Am I right I’m saying if she needs to pay is it based from the day the property is leased out what the property is worth and then what it is then sold at? Will I need to get a valuation done of what property was worth a few years ago?
     
  4. Terry_w

    Terry_w Well-Known Member Business Member

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    not necessarily.
     
  5. Elicon

    Elicon Well-Known Member

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    Ok. Looks like I’ll wait for my accountant to come back and get clarity. Cheers
     
    Terry_w likes this.
  6. Trainee

    Trainee Well-Known Member

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    It may be that you have a choice. But which choice is better financially depends on things like which property grows more and how long you keep it.
     
    Archaon likes this.
  7. Mike A

    Mike A Well-Known Member Business Member

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  8. Elicon

    Elicon Well-Known Member

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  9. Mike A

    Mike A Well-Known Member Business Member

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    Elicon...yes that situation is also covered there
     
  10. Paul@PFI

    [email protected] Tax Accounting + SMSF Business Plus Member

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    The choice can be complex and will impact the ability to reset the costbase at market value according to s118-192 in some cases.

    Land tax is also something to consider too. A similar rule (but far more strict) applies with land tax
     
  11. Dileepa Fernando

    Dileepa Fernando New Member

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    This is my case. Appreciate your valued comments.

    If I move back to my first property in Roxburgh Park now, will I be able to claim it as the primary place of residence.

    Will I be able to qualify for CGT exemption with the 06 year rule in case if I stay there for the next 12 months or more?

    Thanks.


    1/06/2014 Bought the house at Roxburgh Park

    15/12/2014 Rent the house at Roxburgh Park following an accident and went to live with in-laws. ( Roxburgh park property is on rent till now)

    1/01/2018 Bought the second property in Craigieburn and currently living in this property since Jan 2018.
     
  12. Terry_w

    Terry_w Well-Known Member Business Member

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    possibly, it will depend on the details. You should seek tax advice on if you can and what the consequences could be.
     
  13. Paul@PFI

    [email protected] Tax Accounting + SMSF Business Plus Member

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    Your issues a not as simple as you may suspect.

    1. Your partner is already your spouse. Congratulations.
    2. Between you only ONE property can be a former main residence etc

    I believe personal tax advice is a must due to the degree of issues.