Bianca here folks,
thanks for taking the time to read this, coz Im in a bit of a fuddle.
Parents , late 60's, own a block of land. Purchased 9 years ago for 10K, now worth $190K. They have had an offer already for $180K.They are both on old age pension, although father still works occasionally, and their partnership is still operating until next year, when they will fully retire. They are relatively broke, no super, no other assetts, no financial knowledge. Income this year will be around $50K including pension.The block is out in whoop whoop, and there is some guy living on it in their caravan, for nothing. There are also a couple of small sheds on the block, but I doubt if they could pass as being livable.The whoop whoop is in a thriving mining town, but council has decided not to allow subdividing the 5 acre block for 2 years. We have looked at the possibility, but don't want to wait that long.
We also toyed with the idea of pretending that father was living on the block for the PPOR time limit, but it won't work without a dwelling on it, and a caravan is not classed as a dwelling.He actually did live on in for 8 months a few years ago, and spends time there still when he is working in the area.
My parents live in one of my IP's, in the city, for negligent rent, and we still have a loan of $140k on the IP.( valued at $450K)The idea was always for them to live there rent free after the IP is paid of- we pay $120 per week, and have an other 7 years to go.We now thought that it would be best to sell the block, pay of our loan for the IP, and invest the balance in an other IP, to provide for their retirement.( all in our name, so as not to upset their pension) However, CGT is going to eat a huge slice out of the profit, isn't it?
We have toyed with opening a self managed super fund for them, transferring the land into it , letting them retire at the end of the year, and then pulling the money out after July 2007, when the new super rulings come in. But, after having done some more research, it is obvious that you can't do this with a super fund, as we are family, and it would not be an investment as such.
Any advise of how to structure this in the most cost effective way? We calculated a CGT bill of roughly $34k!! which seems unfair to have to pay, when in effect we are subsidising their old age, and not the government.??
Thanks.
thanks for taking the time to read this, coz Im in a bit of a fuddle.
Parents , late 60's, own a block of land. Purchased 9 years ago for 10K, now worth $190K. They have had an offer already for $180K.They are both on old age pension, although father still works occasionally, and their partnership is still operating until next year, when they will fully retire. They are relatively broke, no super, no other assetts, no financial knowledge. Income this year will be around $50K including pension.The block is out in whoop whoop, and there is some guy living on it in their caravan, for nothing. There are also a couple of small sheds on the block, but I doubt if they could pass as being livable.The whoop whoop is in a thriving mining town, but council has decided not to allow subdividing the 5 acre block for 2 years. We have looked at the possibility, but don't want to wait that long.
We also toyed with the idea of pretending that father was living on the block for the PPOR time limit, but it won't work without a dwelling on it, and a caravan is not classed as a dwelling.He actually did live on in for 8 months a few years ago, and spends time there still when he is working in the area.
My parents live in one of my IP's, in the city, for negligent rent, and we still have a loan of $140k on the IP.( valued at $450K)The idea was always for them to live there rent free after the IP is paid of- we pay $120 per week, and have an other 7 years to go.We now thought that it would be best to sell the block, pay of our loan for the IP, and invest the balance in an other IP, to provide for their retirement.( all in our name, so as not to upset their pension) However, CGT is going to eat a huge slice out of the profit, isn't it?
We have toyed with opening a self managed super fund for them, transferring the land into it , letting them retire at the end of the year, and then pulling the money out after July 2007, when the new super rulings come in. But, after having done some more research, it is obvious that you can't do this with a super fund, as we are family, and it would not be an investment as such.
Any advise of how to structure this in the most cost effective way? We calculated a CGT bill of roughly $34k!! which seems unfair to have to pay, when in effect we are subsidising their old age, and not the government.??
Thanks.