CGT payable on inherited property?
- Thread starter Tone
- Start date
You generally will be deemed to acquire it at the valuation on the date of death. But many variables - if you live in it, if it was an investment property/owner occupied by the deceased etc etc.
As Terry says, it requires a detailed history of pre/post CGT status and any main residence use by the deceased.
We don't have inheritance tax in Australia ... we have an enormously complicated CGT.
Rob
Basically if i acquire at say 400k, and the valuation was done at 400k.
Either reside or lease out the property after transfer.
If i sell at anything higher later on i would be liable for CGT on that amount above 400k?
If this is true, then wouldnt it be ideal to have it valued higher around the transfer time.?
Either reside or lease out the property after transfer.
If i sell at anything higher later on i would be liable for CGT on that amount above 400k?
If this is true, then wouldnt it be ideal to have it valued higher around the transfer time.?
"Acquire at 400k" ... does this mean you purchased the asset from the LPR ?
If it passes to you through a will or intestacy then you will inherit the deceased's cost base unless it was their pre-CGT asset or occupied as their main residence at time of death.
There are numerous other exceptions.
Valuation is not optional, it may be required depending upon circumstances.
Rob
Yes, if it was a CGT event.
There is NO VALUATION if inheriting a dwelling that is a post-CGT asset that was not a main residence of the deceased at time of death.
You seem to already know the valuation exceptions and have discounted the other more common rules.
Rob
ok, but from my understanding in order to transfer a title from the deceased, you need to pay stamp duty and in order to pay stamp duty you need a valuation done.
Right? Wrong?
Transfer for a deceased estate to a beneficiary is usually exempt from duty - or nominal $50 duty. No valuation would be needed.
What are we talking about here - main residence of the deceased or was it an IP? Pre CGT asset?
To summarise, this would be correct?
If the deceased person bought the property before 1986 (i.e. before CGT), then when the property is transferred to the beneficiary under a will then a valuation will need to occur to ascertain the market value. This is regardless of whether the deceased lived in the house or it was an IP.
If the deceased was living in the house, and it was bought after 1986, then upon transfer to the beneficiary a valuation would be needed because the cost base has to be re-established as of today since there was a CGT exemption due to the PPOR.
If the house was an IP and bought after 1986, then there is no need for a valuation because the cost base is what he paid for it originally.
If the deceased person bought the property before 1986 (i.e. before CGT), then when the property is transferred to the beneficiary under a will then a valuation will need to occur to ascertain the market value. This is regardless of whether the deceased lived in the house or it was an IP.
If the deceased was living in the house, and it was bought after 1986, then upon transfer to the beneficiary a valuation would be needed because the cost base has to be re-established as of today since there was a CGT exemption due to the PPOR.
If the house was an IP and bought after 1986, then there is no need for a valuation because the cost base is what he paid for it originally.
