CTG exemption and 6 years rules

Discussion in 'Accounting & Tax' started by cmv, 17th May, 2016.

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  1. cmv

    cmv Member

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    Hi,
    I was wondering if I was eligible for the CTG exemption and the 6 years rule.

    Purchased house jointly with Ex(temporary resident) in 2009 - Moved in immediately.
    Separated and transferred house into my name in 2012
    Couldn’t afford on my own so I moved back in with my parents and rented it out.
    Sold in Feb 2016
    Have not had any other property in the meantime.

    Kind Regards,
     
    cmv, 17th May, 2016
    #1
  2. Phantom

    Phantom Well-Known Member

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    Phantom, 17th May, 2016
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  3. Terry_w

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

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    was it a transfer from your ex to you because of a family law type relationship breakdown?

    Either way it could be exempt from CGT depending on the circumstances.
     
    Terry_w, 17th May, 2016
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  4. cmv

    cmv Member

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    It was originally in both names. We seperated and then it was tranfered into my name only.
    So essentially i bought him out (he took the car and things and I kept the house)
    I was worried about the fact that as soon it was transferred into my name I immediatly rented it out.
     
    cmv, 17th May, 2016
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  5. wogitalia

    wogitalia Well-Known Member

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    On basis of the information you can safely say it is CGT free as a result of the main residence exemption and 6 year rule from 2012.

    As Terry has eluded to you may have had a CGT even in 2012 on the transfer depending on the specifics of the transfer. To be fair the ex is the one who likely had the CGT disposal event so you're probably fine either way but you should at least speak with an accountant where you can provide greater specifics for the peace of mind.
     
    wogitalia, 17th May, 2016
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  6. cmv

    cmv Member

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    Thankyou, I defiantly need a new accountant!!!

    So even though in 2012- it was transferred in my name only – I ‘bought’ it and moved out straight away it applies?
    It was rented out immediately and I have never moved back in.
     
    cmv, 17th May, 2016
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  7. Terry_w

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

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    Actually if it wasn't the main residence at the time of separation and it wasn't a transfer done under a breakdown in a relationship then the main residence exemption may only be available on the original share.
     
    Terry_w, 17th May, 2016
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  8. cmv

    cmv Member

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    Now I'm confused. We both lived in there together between 2009 - and he moved out in Dec 2011. Once we finally agreed it was transfered into my name in May 2012, so yes it was transfered due to breakdown of relationship. Tentants moved into the house in May 2012.
     
    cmv, 17th May, 2016
    #8
  9. Terry_w

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

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    Did you have a court order?
     
    Terry_w, 17th May, 2016
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  10. cmv

    cmv Member

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    Binding Financial Agreement
     
    cmv, 17th May, 2016
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  11. cmv

    cmv Member

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    To be exact.
    Transfer of land dated 4th April 2012 * property settlement following breakdown of defacto relationship.
    Tenants moved in 18th April 2012
    Settlement occured 18th May 2012
     
    cmv, 17th May, 2016
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  12. Terry_w

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

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    in that case you may be right.
     
    Terry_w, 17th May, 2016
    #12