My wife was a third owner of her parents PPOR. When she became a third owner she took the amount owing which was 150K We did not receive any rental income when she moved out. The house has been sold now and she ended up with about 200K. How does this work with CGT since we did not receive any rent at all when she moved out, just paying down the 150K? Thanks all
I should say the market value when she became a third owner is about 450K. Market value when sold about 600K
I'm confused by your question. Did your wife and her parents all buy one third of the house they all lived in? Or did she pay her parents for a one third share after they had already owned it? What do you mean by "when she became a third owner she took the amount owing which was $150K?" Did her parents continue to live in that house until it was sold? And I assume if it sold for $600k your wife got her one third share of the sale price and you are wanting to know if she would pay capital gains tax on it? Is that about right?
english please Assuming she is not acting as trustee for the parents, your wife would have to work out her cost base and deduct this from her share of the sale proceeds. She might also be able to use the main residence exemption. get specific tax advice.
Im sorry its confusing, and I really appreciate your reply My wifes parents owned the house however they could not afford to pay off the mortgage so my wife took out a loan to cover the mortgage which was 150k, also she became a third owner. Yes her parents continued to live in the house once it was sold, and we want to know how CGT works in this situation. she did not receive any rent at all when she moved out of the house and was a third owner.
Her capital gain is the amount she paid into the property subtracted from the amount she received on sale. Your figures indicate this may be $50K? Expenses she paid, 6 year ruling and and discounts apply as usual. Whether she received rent or not is irrelevant, that would have been declared as income each tax year. Any accountant should be able to assist you.
Not really. It is based on cost base expenses, excluding principal and she would be assessed on 1/3 of the gain even if she did not receive this.
