Transferring a property for $1

Discussion in 'Accounting & Tax' started by Aspirant, 5th Dec, 2020.

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  1. Aspirant

    Aspirant Member

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    i am scratching my head over this one. A property was transacted for $1.161m in 2015. The next transaction was for $1 in 2017. A 6 storey apartment block is being constructed there. What’s the likely explanation for a $1 transfer and the stamp duty and cgt implication?
     
    Aspirant, 5th Dec, 2020
    #1
  2. skater

    skater Well-Known Member

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    Probably just an internal change of ownership. eg, from private to Company or Trust, but still with the same owner heading it up.
     
    skater, 5th Dec, 2020
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  3. Terry_w

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

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    Family transfer probably. Taxed at market rates.

    Btw, this would best be avoided inost cases
     
    Terry_w, 5th Dec, 2020
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  4. Aspirant

    Aspirant Member

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    Can I assume that full stamp duty at market value of the property would have been paid not withstanding the transaction value? Could have been transferred to an associate company with tax losses.
     
    Aspirant, 5th Dec, 2020
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  5. Terry_w

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

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    Probably but I wouldn't assume so.
    Unlikely on the company part but possibel
     
    Terry_w, 5th Dec, 2020
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  6. Trainee

    Trainee Well-Known Member

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    Doesn't the transferee actually pick up the $1 cost base?
     
    Trainee, 5th Dec, 2020
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  7. Terry_w

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

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    No
     
    Terry_w, 5th Dec, 2020
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  8. Paul@PAS

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

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    Absolutely not. Ever.
     
    Paul@PAS, 6th Dec, 2020
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