cgt info please

We have had a property for about ten years which was our ppr for the first two. It has been rented out ever since which we have declared and were charged tax on. As we are getting older we would like to sell it and access some spending money. We realise we would be up for cg but wondered roughly what you can claim back.

 

I did something similar a while back and the accountant allocated CGT pro rata and added back all holding costs as deductions.

 

I have a tax tip on this. Check my signature for a list of tax tips that I have written

 

might want to consider whether it is worth applying the six year main residence absence provisions after you moved out.

if you have another ppor then this stragey will put it into the cgt net but third element costs on that property may significantly reduce the capital gain if and when you ever eventually selling it. if you dont plan on ever selling then definitely worth considering.

worth doing the sums.

 

Definitely should weigh up your options with your accountant.

 

Valuation at date you moved out (valuers can re-assess that value) will be the initial costbase it seems as that was the date the IP first produced income. Then after applying the CGT main residence absence concession as Mike refers to you may find that the taxable period subject to pro-rata is around 2 years. So 1/4 (2/8th) of CGT gain may be taxable. If sold after retirement / cessation of earning there could be a tax benefit BUT it may lengthen the taxable ownership period. Also maybe a personal deductible super contribution each may pull the tax down further in some cases (check this)

Our CGT checklist indicates a guide to relevant CGT items. The purchase costs wont be relevant if you use s118-192 (First used to produce income rule) BUT...If you did improvements in the first 2 years make sure the valuer allows for this in the valuation.

Keep in mind anything done to improve that wasnt deductible after year two may add to the costbase as would any selling costs. Any depn / cap allowances may also reduce the costbase in some cases.

 

thanks for that Paul