CGT payable on Transfer of Title?

Discussion in 'Accounting & Tax' started by Paul Luck, 15th Nov, 2021.

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  1. Paul Luck

    Paul Luck Active Member

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    My ex and I own an investment property together. I will be buying out her half and transferring the title from joint owners to fully me. Is my ex liable for CGT at this event or is it when the house is sold some time in the future?
     
    Paul Luck, 15th Nov, 2021
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  2. thatbum

    thatbum Well-Known Member

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    Are you doing this pursuant to court orders or a binding financial agreement?
     
    thatbum, 15th Nov, 2021
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  3. Terry_w

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

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    Tax Tip 100: Transfers between Spouses and CGT https://propertychat.com.au/community/threads/tax-tip-100-transfers-between-spouses-and-cgt.9275/

    Unless an exemption applies she will be liable based on the date of transfer or contract if there is one. If you plan to claim the interest get some tax advice.
     
    Terry_w, 15th Nov, 2021
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  4. Paul Luck

    Paul Luck Active Member

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    Yes, Consent orders
     
    Paul Luck, 15th Nov, 2021
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  5. Paul Luck

    Paul Luck Active Member

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    I just read if its a court order or BFA its a CGT rollover event and she pays no CGT, assume I will pay it (for the period it was used as a rental) when I sell, even if I move back in and make it my PPOR?
     
    Paul Luck, 15th Nov, 2021
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  6. Terry_w

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

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    If you use the roll over on the break down in a relationship it is as if you owned it from the beginning. You will pay CGT when you sell, even if you move into it. based on s118-185 apportionment
     
    Terry_w, 15th Nov, 2021
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    Mike A and thatbum like this.
  7. Paul@PAS

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

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    Important - The whole of the property may likely be treated as if you always owned it. However the loan after the arrangement may NOT be fully deductible. Personal property tax advice is essential.

    The family court orders etc should always consider the value of the assets less any contingent tax liabilities that the parties may incur when framing the agreement. Yes you may acquire the property in full but yes you also acquire the CGT liability, if any. The one thing you cant claim is the main residence exemption if it wasnt your dwelling (eg the ex lived there) since the rollover basically excludes the ex as ever having had a interest.
     
    Paul@PAS, 16th Nov, 2021
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