is there tax payable on transfer?

[tj22]

Hey guys,
so random scenario so lets say james and hannah own a property together and james wants to sell but hannah doesn't want to. so hannah decides to pay james out. what has to happen on the technical side for this to happen?
is it as simple as hannah and james going to the land titles office and james transferring his name off the title of the property?
and because they also went 50/50 on the home loan as well can they just leave the loan as is, because hannah will now have 100% ownership of the property so even if james name is on the loan as 50% it would only effort him if he tries to qualify for a new home loan? (because his name isn't on the title of the property) he now would not have a claim to the property?

TAX question is there any capital gains tax payable because ownership has changed?? because they have removed james name from ownership (who for tax purposes has 90% ownership)
P.S I believe they are tenants in common
Cheers, tj22

 

[Terry_w]

Not that simple.

This is a transfer of title. It will trigger both stamp duty and CGT unless an exemption applies. This will be at market rates.

Loans will need to be paid out, mortgage discharged and new loan applied for and new mortgage lodged.

Generally a conveyancer will be needed and this should always be a solicitor as advice is needed on the asset protection and estate planning aspects.

I should add that it will be Hannah that pays the stamp duty and James that pays the CGT, both assessed at market value of the property.

 

[tj22]

Not that simple.

This is a transfer of title. It will trigger both stamp duty and CGT unless an exemption applies. This will be at market rates.

Loans will need to be paid out, mortgage discharged and new loan applied for and new mortgage lodged.

Generally a conveyancer will be needed and this should always be a solicitor as advice is needed on the asset protection and estate planning aspects.

I should add that it will be Hannah that pays the stamp duty and James that pays the CGT, both assessed at market value of the property.

oh so stamp duty will have to be paid again?
because all we are doing is taking one persons name of the title we are not adding a new name? thats kinda ******** i think

wouldn't a exemption apply between "tenants in common" ?this is in QLD

 

[tj22]

or could they change the ownership % atm james has 90% for tax reasons.

and hannah 10% could we change to so hannah has 90% and james 10%

and then just get a limited power of attorney over james for the asset of the property? and just leave it as is. james is ill and doesn't have long to live.

 

[Terry_w]

oh so stamp duty will have to be paid again?
because all we are doing is taking one persons name of the title we are not adding a new name? thats kinda ******** i think

wouldn't a exemption apply between "tenants in common" ?this is in QLD

Its a change in ownership = dutiable transaction. No exemption in QLD (from memory) even if the 2 are spouses.

 

[Terry_w]

or could they change the ownership % atm james has 90% for tax reasons.

and hannah 10% could we change to so hannah has 90% and james 10%

and then just get a limited power of attorney over james for the asset of the property? and just leave it as is. james is ill and doesn't have long to live.

changing percentage ownership also results in stamp duty and CGT and new loans etc will be needed.

POA won't change anything. A POA involves one person giving another person the power to make contractual and legal decisions on their behalf.

If James is sick why doesn he want to change now? If he leaves his share to Hannah in his will there would be no stamp duty and No CGT (until she sells).

 

[pinkboy]

This is why correct structure, forward planning and tax consideration all need to be thought of before exchanging contracts.

If you want/need to change, then expect there to be costs.

pinkboy

 

[coastymike]

But I pay 50 and can call my accountant on weekends anytime including while he is making love to his wife. Why would I need all that stuff.