Property transfer to own kid

Discussion in 'Accounting & Tax' started by Declan1212, 18th May, 2022.

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  1. Declan1212

    Declan1212 Well-Known Member

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    Hi

    What is the best way (save tax) to give one of my investment properties to my kid (full time working)

    Im in NSW and holding Australian PR visa but has not live in Au for the past 200 days.

    Will this transaction be treated as a normal property sales which my kid has to pay the stamp duty? There will be no capital gain to me for this property.
     
  2. Peter_Tersteeg

    Peter_Tersteeg Mortgage Broker Business Member

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    All of the transfers from parents to kids that I've seen involved full stamp duty at market value.

    They'll probably have to pay CGT as well.
     
  3. Mike A

    Mike A Well-Known Member

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  4. Terry_w

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

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    The most tax effective way is to die - but perhaps not the best way to transfer
     
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  5. Terry_w

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

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    why not? Are you a tax resident or not, if no the main residence exemption won't apply.
     
  6. larrylarry

    larrylarry Well-Known Member

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    or through family law settlement but there can be no marriage in this context.
     
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  7. Paul@PAS

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

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    This could trigger non-resident transfer duty and issues with land tax, CGT withholding, no CGT discount and much more. Market value must be used for all this. Then there are the FIRB rules which may prohibit a non-citizen owning Australian property unless they apply for approval.

    I dont necessarily agree that this sale would be a exempt gain as the main residence exemption may not have been met and may have been lost retrospectively on departure from Australia. The absence rule has some limits not to mention issues with the family and adopting ONE worldwide main residence. Insufficent information really and any proposal needs legal and tax advice.
     
  8. Paul@PAS

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

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    A child can acquire a parents former property interests under such orders.
     
  9. tppha7

    tppha7 Active Member

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    They may plan to transfer the property to the child at a cost - price ( less than market price probably) and record no profit from the transfer.
    Even if that's the case, I think the ATO and State revenue office might use the current market price to determine the CGT and stamp duty if the transfer price is significantly lower than the market price.
     
  10. Terry_w

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

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    Yes cgt and duty at market rates but perhaps the value and cost base are the same so no tax to pay
     
  11. larrylarry

    larrylarry Well-Known Member

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  12. Paul@PAS

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

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    Saw one recently where the child was given title as the Father didnt want the Mother to benefit and potentially lose asset wealth on death remarriage etc and this protected the child who had specific long term housing needs. The house had been specially constructed with that in mind. They had considered a special form of trust but legal advice picked holes in it. It also gave the child the benefits of asset protection. The ex wife was given other property also.
     
  13. larrylarry

    larrylarry Well-Known Member

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    A lot of hoops to jump through and costs to get this order I would think. Good to know.