does a person have to pay CGT on an inherited property? say i will make 100,000 if i sell my aunts home after only being in my possession for 3 months. How much will have have to pay the tax man?
help
Im cluelessYes, you will, clueless. You’ll pay it at the usual tax rate- on the profit- given that you’ve held it for less than 12 months.
kay henry
thank you,
well that suks, maybe i should hold it for 12 months and get 50% deduction. As a query though what if i sold it at a lower cost and made a loss? what tax if any would apply?You would pay no tax if you made no capital gain. That would be called cutting off your nose to spite your face.”
kay henry
It will also be called tax evasion punishable by a potential jail term.
Robert Bou-Hamdan
Mortgage AdviserHi Clueless,
check it out with the tax man. We inheirited a property and have been assured that we will pay no CGT if we make it our PPOR.
Landt.Originally posted by landt64:Hi Clueless,
check it out with the tax man. We inheirited a property and have been assured that we will pay no CGT if we make it our PPOR.
Landt.Yes but how long would you have to live in it so as not to pay CGT?
I am not a tax expert, but I beleive you do not necessarily have to pay tax on inherited property.
Was the property your Aunt’s PPOR? If so, I think you could sell within 2 years and pay not have to pay the CGT.
Also, even if it was an investment property, CGT may not apply if she had purchased it prior to 1985.
Since there are potential large sums involved it would be wise for you to talk to an accountant before you do anything.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Yesah, Terry- oops @ me! Here’s some info below from the Tax Office (www.ato.gov.au) :
Records relating to inheriting an asset
When you inherit an asset as a beneficiary of the estate of a person who died on or after 20 September 1985, you may need to obtain information from the executor or trustee.
If the asset was acquired by the deceased person before 20 September 1985, you need to know the market value of the asset at the date of the person’s death and the amount of any relevant costs incurred by the executor or trustee. This is the amount that the asset is taken to have cost you. If the executor or trustee has a valuation of the asset, get a copy of that valuation report. Otherwise you will need to get your own valuation.
If the asset you inherit was acquired by the deceased person on or after 20 September 1985, you need to know full details of all relevant costs incurred by the deceased person and by the executor or trustee. Get those details from the executor or trustee.
Inheriting a main residence
If you inherit a house that was the deceased’s main residence, any capital gain on its subsequent disposal may be exempt. However, until this is known, you should keep records of relevant costs incurred by you, the deceased or their trustee or executor.
You will not need to keep records of the deceased’s costs if:
* you inherited the house after 20 August 1996
* the house was the deceased’s main residence just before they died, and
* the house was not being used to produce income at the time of death.In those circumstances, you will be taken to have acquired the house at its market value at the date of death. If the executor or trustee has a valuation of the asset, get a copy of that valuation report. Otherwise you will need to get your own valuation.
___________kay henry
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