Looking to take over my dads property

Discussion in 'Accounting & Tax' started by fedex, 3rd Sep, 2019.

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  1. fedex

    fedex Active Member

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    My dad currently has a property where there was an offer of $450k a year ago.

    House was purchased in Dec 2007, he lived in it for a 1-2 years back then and then rented it out up until 2018 and has since lived there for 1 year as his PPOR.

    What the CG tax implications if he were to transfer this/sell this to one of his children at market price?

    He currently has another property excluding this one and he doesn't want to look after the the mortgage or property anymore.

    Just trying to get some opinions and thoughts as opposed to tax advice (I have my accountant for that).
     
  2. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker Business Member

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    CGT event as per normal.

    Selling to you will not change his assets for centrelink purposes as he would have cash equivalent.
     
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  3. Trainee

    Trainee Well-Known Member

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    Where will he be living after you buy it?
     
  4. fedex

    fedex Active Member

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    He has another property, the property in question is a 3BR so it wouldn't make sense for him to live there anyway.

    I see, that is fine it shouldn't be too much. Regard Centrelink - he is roughly 10 years away from a pension so it is quite a while between now and then. If I'm being honest, he isn't a great saver and loves to spend and loves to go overseas/eat out so it would not surprise me if he were to spend his money in the 10 years leading up to pension age. He is pretty much in retirement mode at the moment. Do they count super as part of cash equivalent?
     
  5. Paul@PFI

    [email protected] Tax Accounting + SMSF Business Plus Member

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    Potential wasting of a retirement phase asset may be a financial concern.
     
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  6. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker Business Member

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  7. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker Business Member

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  8. Paul@PFI

    [email protected] Tax Accounting + SMSF Business Plus Member

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    I suppose I shoudl explain.

    Many well intentioned people seek to deplete assets thinking a pension sounds like a great thing. So they start to deplete assets early well before true pensionable ages. So they end up without assets early.

    One sound financial strategy is to NOT reduce and deplete assets and wealth. Build it. Its better to retire with money and a part pension than a pension alone. Once a person retires they tend to deplete wealth so dont strat that process early.
     
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  9. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker Business Member

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    Yes I once had a client who wanted to give away a $1mil commercial property to his son so that he could get a pension valued at about $35k or so. Didn't make sense.
     
  10. Paul@PFI

    [email protected] Tax Accounting + SMSF Business Plus Member

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    Often encouraged by the son too.....Amazing what a proficient tax, legal and financial adviser he may be when things benefit them financially.