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Exempt from tax liability

Discussion in 'Accounting & Tax' started by thegreat, 27th Jan, 2016.

  1. thegreat

    thegreat Well-Known Member

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    Will this example allows exempt from tax liability

    Say I am single and aged 99 years old and own land size 1000 m2.
    Say I have dual occupancy property on the land, equivalent to duplex.
    But in my example, my ground floor has the same structure as my first floor.
    Say i received 500/week from my tenants thru real estate agent.
    Say I receive part payment from gubba.
    Would i be exempted from lodging a tax return?
    If so why
    if no why
    Would I be exempted from CGT?
    If so why
    if no why
    please share
     
    Last edited: 27th Jan, 2016
  2. thegreat

    thegreat Well-Known Member

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    one more
    would i be exempted from Land Tax?
    please share your knowledge, thank you
     
  3. Scott No Mates

    Scott No Mates Well-Known Member

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    why would you think that you could be exempt from any of these taxes - earnings are above the tax threshold.

    You could decide not to lodge, gubb's not going to lock you up, you could cark it before they find out and charge your estate. You could claim hardship or S32 under the crimes act - mental illness.
     
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  4. thegreat

    thegreat Well-Known Member

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    hahaha there are always ways....it seems.
    In all seriousness though, how would the land tax work in this example.
    say the property total value is 600000.00.
    half of the property rented out
    half of the property 300000.00
    exempt also 300000.00
    would this mean that there is no land tax liability, in this example?
     
    Last edited: 27th Jan, 2016
  5. Rayan

    Rayan Active Member

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    If you own a duplex (both sides) and live in one and rent the other then the entire property is covered under the PPOR exemption is NSW and therefore is not liable for any landtax.

    See revenue ruling:
    Concession for land on which there is one other residential occupancy – clause 4
    Revenue Ruling No. LT 082 Version 4 | Office of State Revenue

    There is no escaping/ exemptions for income tax though (unless the entire property is owned by a super fund and the owner is in pension phase- that income is tax free).
     
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  6. Paul@PFI

    Paul@PFI Tax Accounting + SMSF Business Member

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    I am single and aged 99 years old and own land size 1000 m2.
    Say I have dual occupancy property on the land, equivalent to duplex.
    But in my example, my ground floor has the same structure as my first floor.
    Say i received 500/week from my tenants thru real estate agent.
    Say I receive part payment from gubba.
    Would i be exempted from lodging a tax return?


    Age is inconsequential to tax obligations. However older Australians do have more generous tax concessions. That said if you receive ANY government support the additional income may be required to be reported to DVA or Centrelink etc.

    Rental income must be reported on a return annually together with any corresponding deductions. This obligation exists beyond the issue of a tax threshold. So even if you earn $5K and have $5k of deductions the return must be lodged.

    There is no such thing as exemption top lodge a return. There may be times when a return is not required however and in those cases you may need to annually advise the ATO on the reasons why.

    Land tax is a state impose tax on the asset and is dependent on the unimproved value of the land v's the relevant state threshold. It is not related to the issue of lodging a Commonwealth Income Tax Return. To avoid bracket creep and arrears I generally recommend all land owners register regardless of whether its is a value range that is taxable. Land tax arrears are detected often on death or sale of land when a transfer form is presented .. a land tax clearance certificate is a requirement to transfer land. This process is intended to identify the debt and collect it and any penalties !!

    CGT is a tax on assets when they are sold. If you don't sell the property the CGT liability if any passes to your beneficiaries. The asset would only be partially exempt...50% with the general 50% also apply so that a maximum of 25% of the calculated profit might be included in taxable income and taxed at marginal rates - If it falls under the thresholds it could = zero.
     
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  7. Paul@PFI

    Paul@PFI Tax Accounting + SMSF Business Member

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    It is only exempt income when the fund lodges a income tax return that complies with all the rules of exempt pension income. Failure to comply with a simple rule such as lodging a return mean its taxable.