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QLD Capital Gains Tax on Property in Will?

Discussion in 'Wills and Estate Planning Law Forum' started by Vanessa Lake, 13 March 2015.

  1. Vanessa Lake

    Vanessa Lake Active Member

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    Is Capital Gains Tax (CGT) taken into account when dividing up the will if one party is taking property in as a major part of their entitlement?
     
  2. KLP

    KLP Member

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    As a general rule, CGT applies to any change of ownership of a CGT asset, unless the asset was acquired before 20 September 1985 .Say for example the family home is left to a beneficiary, CGT will not apply if the property is sold within a two year period, thereafter CGT is applicable.
     
  3. Vanessa Lake

    Vanessa Lake Active Member

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    In my case my fathers main property worth $1,200,000 was given in the will to one of 4 siblings plus 1/4 of the remaining estate which includes another house that my father inherited from his mother worth aprox $450,00. I want to take this house and the remaining amount of my 1/4 share of the estate, but want to know if the CGT attached to it is taken into account as, if it was sold prior to distribution the CGT would be coming out of each 4 shares not just mine. Legally shouldn't the aprox 50,00 CGT be taken into account? so that I get the house at say $412,500?
    I saw an accountant who believed CGT would apply whenever I sold the house, regardless of weather it was within 1yr, 2yrs or later.
     
  4. Vanessa Lake

    Vanessa Lake Active Member

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    My grandmother died in Oct 1999.
     
  5. Vanessa Lake

    Vanessa Lake Active Member

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    OK...The property in ? is in NSW not QLD
     
  6. Sarah J

    Sarah J Well-Known Member

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    Hi Vanessa,

    As a general rule:
    • CGT (and other tax) obligations pass from the deceased to their successor (the executive and then you) upon your father's passing
    • If you inherit a specific property (e.g. house), any obligations attached that that property passes to the beneficiary (you) and does not come out of the general estate (i.e. effectively shared by all beneficiaries)
    When you inherit your father's house, either directly or through an executor, CGT applies but it may be disregarded as a special rule to CGT (because it passes from deceased to a personal representative or beneficiary).

    This means, you should not be charged CGT on the transfer of the house from your father to you. However, if you later sell it, CGT will be charged. There are exceptions to this, for example: if you are a foreign resident. To understand further, you can read the ATO's information sheet "Deceased estate and CGT".
     
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  7. Sarah J

    Sarah J Well-Known Member

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    It does not matter, for CGT purposes, where the property is located. CGT is a federal tax so it is the same across Australia. Note, local taxes may also apply (e.g. land tax).
     
  8. Vanessa Lake

    Vanessa Lake Active Member

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    Thankyou for the info, I will check out the ATO link.
    appreciated,

    Vanesssa L
     

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