I have a very simple CGT query to which I thought I knew the answer but now not sure. Here's the scenario.
Married couple owns a property. Loan for the property is in both partners' names. Title for the property is in wife's name, who is the lower income earner.
Property is sold after a year.
Is CGT charged on 50% of the capital gain at the wife's income tax rate?
In other words, does it make any difference to the amount of CGT payable if the loan is in both partners' names?
thanks in anticipation,
CarlinCG is calculated and then divided up based on ownership, 50/50 or whatever. You pay your share and the wife pays her share. Tax may be different depending on your individual incomes.
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
Still not clear Terry. The property is held in the wife's name. Does that mean that (for tax purposes) it's owned fully by her and therefore CGT (if it's sold) is based on her tax rate?
If the property is held in the wife's name (ie the wife owns the property) then the capital gain is in her name as well. It makes no difference how the loan was set up.
CGT tax is paid at the marginal tax rates, and if held for longer than 12 months, there would normally be a 50% discount on the capital gain.
but then again if this property is your own personal home and you live in it you dont pay any tax when you sell it $000.
if its an investment, lets say you paid 300k and you sold it for 420k and lets say agent fees and other costs were 20k then you are left with 100k capital gain which you will get taxd 50% of the 100k so you will be left with 50k
Dan 42 – thanks, that's what I thought (and hoped) was the case. But I read an article (which I now can't find) that had fuelled some doubts.
Thanks for setting me straight.
Carlin
carlin wrote:Still not clear Terry. The property is held in the wife's name. Does that mean that (for tax purposes) it's owned fully by her and therefore CGT (if it's sold) is based on her tax rate?Sorry, I read "married couple owns a property". I agree with Dan. owner = title holder gets the gain.
Carlin. maybe you were reading something about the salary sacrifice arrangements – which are no longer available.
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
You must be logged in to reply to this topic. If you don't have an account, you can register here.
