What happens when

Hey all,

In the situation of a rental property. What happens when you invest in capital works for items which would usually be depreciated - Think replacement of unserviceable items like paint carpet etc.

And then part way through the depreciable life, you sell the property. Are you able to instantly write these off, or do they form an adjustment on the cost base?

To make things slightly more complicated - This is in the instance of a marriage breakup, so there is no CGT event, and if there were a choice, it would be preferred to affect the taxible income, rather than a CGT cost base

Thanks

 

They are an adjustment to the costbase. There is no balancing adjustment other that to the costbase. Certainly no write off.

For a marital split there is no CGT event as such unless the property is disposed. If its transferred between former spouses then the acquisiring party is generally taken to be treated as if they had always owned the property and the costbase may reset from 50% to 100%

 

Thanks Paul - Just a shame it was not the info that I wanted to hear haha