Tenants in Common - CGT when splitting the land between tenants in common)

Hi all,

Is it possible to restructure landholdings without triggering a CGT event? The context is a large block of land (over 3 titles). 2 people are tenants in common on each title. One of these titles has a house, the other 2 are vacant land. The land isn't being sold, but 1 of the people on title would like to move into the existing house, the other would like to build a new house on one of the parcels of vacant land. They'd like to both be the sole proprietor of the their own title, rather than remain tenants in common on all of them. Is it possible to do this without triggering CGT?

Is there any ability to transfer the land within a family? or will this be treated by the ATO as the same as a sale?

Thanks for reading,

 

You may need to stump up for Stamp Duty & CGT unless you can prove a trust relationship or have a deed of partition to indicate that subdivision was the explicit intention of the 3 owners.

 

Generally not unless partitioned and held as trustee

 

it should have been structured differently on purchase..now it is going to have CGT and stamp duty issues

 

Could even be a GST issue since partitioning is a potentially taxable supply and the intentions of the buyers of the vacant portion may impact this for all the land.
Its an area where complex (and costly) legal advice would be wise - In your state from a proficient duties adviser. The legal fee cost may address some tax costs.

 

some very limited facts from the OP but if the original intention was for a long term hold and they are aligning the interests to how they wanted things to be initially then GST generally wouldnt apply.

 

Yes...But a change of intention ? Breaking apart long term things aftre 20 years tend to look different to the past 20 years. And can be problematic to satisfy OSR etc. Definately one for a duties legal specialist