Triggering CGT - relationship breakdown

My ex and I have separated amicably and are in the process of submitting the paperwork to the Family Court for consent orders on our two properties - the intent is one property (B) will be transferred from joint ownership to me and the other property (A) from joint ownership to the ex.

Property A was our original PPOR before we purchased and moved into Property B and turned Property A into a rental for 7 years. The ex has since moved back into Property A and now resides there. I reside in property B.

I expect I will be up for 7 years worth of CGT on property A and am seeking to understand what will trigger the CGT event on property A for me - is it the date of the consent order being issued from court, the transfer of title or some other event?

This ATO page suggests it is transfer of title - CGT events the rollover applies to

thanks

 

If an asset is transferred under a contract, the CGT event happens when the contract is entered into.

If there is no contract, the CGT event happens when the change of ownership of the asset occurs.

 

Thanks Mike, much appreciated.

For a layperson like me, I take it that in this case that "change of ownership of the asset" is the transfer of title of Property A from joint ownership into the ex's name?

 

If an asset is transferred with or without consideration arising from a marital split a special CGT position may occur. The asset transfer may not be a taxable CGT event at that point. It would be VERY wise to seek tax advice on any proposed asset changes as the CGT liability that attaches to each asset should be understood. A solicitor for the divorce should not assist with the tax advice unless they are a registsred tax agent as it involves calculation of a tax liability. Any consideration in property settlements is usually NOT a costbase element as such.

eg Fred and Wilwa and getting divorced. Fred is given title to the IP worth $1m. Wilma gets title to the former home worth $1m. They ARE NOT equal transfers. Fred will also inherit all the existing tax liability on the IP as if he had always owned it and had never lived there and any future m ain residence exemption would only commence (pro-rata days) from the time he ouccupies his new home. Wilma may have a 100% exempt main residence, past and future.

 

Thanks Paul, this is interesting!

I'm off to seek advice as suggested.

 

make sure you load the ex up with the CGT as much as you can.