Join Australia's most dynamic and respected property investment community

Tax Tip 52: Trusts and the main residence exemption for CGT

Discussion in 'Accounting & Tax' started by Terry_w, 11th Oct, 2015.

  1. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

    Joined:
    18th Jun, 2015
    Posts:
    8,957
    Location:
    Sydney
    Trusts and the main residence exemption for CGT


    Discretionary or Unit Trust owned properties do not get the main residence CGT exemption under section 118-110 of the ITAA 1997. This applies even if the residence is being used as the main residence of the trustee or a beneficiary of the trust.

    See the legislation below and note the bold bit below, s 118-110(1)(a) clearly states the exemption is only available for individuals.

    http://www.austlii.edu.au/au/legis/cth/consol_act/itaa1997240/s118.110.html


    Note - there are limited exceptions such as for a special disability trust which can be exempt from CGT.

    Keywords: CGT; Trusts
     
  2. Paul@PFI

    Paul@PFI Tax Accounting + SMSF Business Member

    Joined:
    18th Jun, 2015
    Posts:
    2,358
    Location:
    Sydney
    Vic has a land tax exemption for trusts when a beneficiary resides. Arguably its out-trumped by the CGT issue. I have seen trusts with issues which negate the CGT issue etc....Non-residents etc