Is a monetary settlement sum when paying a third party to agree to remove a caveat deemed capital expenditure is defending or preserving your capital gains tax asset?
VIC What Capital expenditure costs are deemed to reduce your capital gains tax?
- Thread starter Harry De Elle
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Perhaps you're wondering if it's a non-capital cost of ownership such as may factor into the cost base for the calculation of CGT
(section 160ZH).
Or perhaps if it's an incidental cost of ownership.
This is not really a question for lawyers (and especially not a question for real estate agents or conveyancers).
You'll get your best advice here from an accountant (by which I mean a proper CPA, CA, or NIA).
This because among others things, there are different types of cost bases (ordinary, indexed, or reduced)
depending on how long you owned the asset, and
because an accountant will do for you the one thing you actually want,
which is to reliably calculate The One Number At The End Of It All.
Bear in mind also that if the property is being inherited, then the sale may not be a CGT event, or may be partially exempt.
You can read some of what the ATO says about that angle here.
(section 160ZH).
Or perhaps if it's an incidental cost of ownership.
This is not really a question for lawyers (and especially not a question for real estate agents or conveyancers).
You'll get your best advice here from an accountant (by which I mean a proper CPA, CA, or NIA).
This because among others things, there are different types of cost bases (ordinary, indexed, or reduced)
depending on how long you owned the asset, and
because an accountant will do for you the one thing you actually want,
which is to reliably calculate The One Number At The End Of It All.
Bear in mind also that if the property is being inherited, then the sale may not be a CGT event, or may be partially exempt.
You can read some of what the ATO says about that angle here.
Thanks...I was looking for the legal interpretation of Element 5 of establishing the 'cost base' of an asset with respect to examples of 'defending' or 'preserving' the ownership of the capital gain asset pursuant to s110.25 of the Income Tax Assessment Act 1997
< nods >
This can't be the first time it's ever come up.
I see caveats, and big-canoe talk of caveats, in practice pretty often,
often in terms of debt actions, but sometimes, in Wills and Estate disputes as well.
Ask your accountant about tax caselaw.
Further, if there isn't any, ask your accountant if the ATO has made in Interpretive Decision or a Public Ruling on the question.
This can't be the first time it's ever come up.
I see caveats, and big-canoe talk of caveats, in practice pretty often,
often in terms of debt actions, but sometimes, in Wills and Estate disputes as well.
Ask your accountant about tax caselaw.
Further, if there isn't any, ask your accountant if the ATO has made in Interpretive Decision or a Public Ruling on the question.
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