CGT on Reno deal

Discussion in 'Accounting & Tax' started by the world is your oyster, 31st Jul, 2017.

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  1. the world is your oyster

    the world is your oyster Well-Known Member

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    victoria
    wondwring if anyone can answer this ?

    Iam going to do a JV deal with a family member we have secured a off market deal and are going to do a Reno on the house and on sell it settlement to settlement expected to be 5 months , if we get a jv agreement do we just split the profit and get taxed each at our own tax rates ?
    She is on 80k pa
    I'm around 140k pa as I have another Reno deal on the same year

    Another thing we are wondering her husband is retiering this year is the profits best to stay out of his name and only hers ?

    Basically is CGT just a tax we pay at the same rate we do in our day jobs ? Or is there another rye you have to pay it ? I'm familialr wth the discount if held for longer then the 1 year
     
  2. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    Probably income tax not CGT by the sounds of it. Usually the owner is the one taxed. If a proper JV agreement set up a deductible fee might be payable by the owner to the other person if they are providing some service related to the project.

    Who should be the owner and how to set it up requires specific legal advice.
     
  3. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    A written partnership agreement may be capable of use sometimes to reflect a different profit share v's title. get personal advice.

    I have attached our developer toolkit here for some of the general tax issues you may need to consider.
     

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  4. Mike A

    Mike A Well-Known Member

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    from the limited facts cgt doesnt apply to these type of transactions.

    profit from an isolated transaction subject to income account not cgt account.

    also factor in gst
     
  5. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    Margin scheme can be used when planned and may substantially reduce GST impacts and enhance profit