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Company Title and CGT

Discussion in 'Accounting & Tax' started by Redom, 10th Oct, 2016.

  1. Redom

    Redom Mortgage Broker Business Member

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    Hello experts,

    A technical one - an area in Sydney only allows company titles for duplex homes. There's no real option to do it any other way (council) for this type of stock.

    Appreciate the financing consequences and potential impacts on price, but curious to better understand the taxation consequences:

    1. Is CGT exemption available on the main home for anyone who purchases a duplex (or shares in the company)?
    2. Is CGT exemption available to those that build duplexes under a company title and live in one?

    Thanks,
    Redom
     
  2. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    Yes i believe tjese are treated the same as strata title.
     
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  3. Redom

    Redom Mortgage Broker Business Member

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    Great thank you Terry!

    Purchasing a share of a company makes it a little odd (housing or company treatment)
     
  4. Brian84

    Brian84 Well-Known Member

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    Redom,
    When I eventually get my builders licence you can purchase a stake of the company ;):D then we can build duplexes take in the money and live happily ever after.
     
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  5. Paul@PFI

    Paul@PFI Tax Accounting + SMSF Business Member

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    The CGT issue is explained this way. The landowner acquires an interest in a company (specific shares) rather than land itself. The shares are the CGT asset not land, the land technically never changes hands and is always owned by the company. The shareholders possess a right...One for Terry to explain.. Its similiar to a trust interest.

    Owning shares does not limit CGT discounts. The concern you are referring to is really when a company owns land and the company sells for a profit. Its cannot pass a cap gain that is discounted to its shareholders. In the title issue the landowners would have no such concern as they are transferring shares - A CGT event.

    The Main residence Exemption is available as Tax Law doesnt talk about title. It refers to an "ownership interest". You dont have to be named on title to have a CGT interest !! I reckon my Bank should pay CGT too !!
     
  6. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    I dont come across company title much but the company constitution give each shareholder a specific right to occupy a unit in the dwelling owned by the company.
     
  7. Shahin_Afarin

    Shahin_Afarin Residential and Commercial Broker Business Member

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    Matraville? amma right?
     
  8. Paul@PFI

    Paul@PFI Tax Accounting + SMSF Business Member

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    Mr Hawaii has returned.