Love & Affection, CGT, Stamp Duty

[Sushiboy]

Hi,

Searched the forums but could not find a clear answer that matched my circumstances.

My wife and I own our current PPOR (50% each), with a mortgage outstanding. We have bought a new house to live in and intend to turn our current PPOR into an investment property.

We wish to transfer the current PPOR from both our names into my name only. I understand from our solicitor that this can be done for 'love and affection' and this transfer would be exempt from stamp duty (we live in Victoria).

My questions are:

-Does anyone have first hand experience in this kind of transfer, and has anyone been hauled over the coals for it?

-Would this kind of transfer (keeping in mind that the house is our current
PPOR) trigger a CGT event?

-Is there anything in the way we structure this that will help protect us on these issues?

I will be seeing an accountant on this issue, but would appreciate any advice from people on the forum.

Thanks, and kind regards,

SushiBoy

BTW - have searched the SRO website (Vic) and found little to help me.

 

[Raddles]

hi there

an exemption from transfer duty in cases where there is a transfer by
way of gift of an interest in residential land from one party to a marriage or de facto relationship to the other party, if the parties will own the land as joint tenants or tenants in common in equal shares after the transfer and the property will be the principal residence of the parties.
- is the normal exemption for this sort of transaction

I believe you could get an exemption in your situation if it was part of an agreement arising from a property settlement where parties were divorcing etc

The sort of transfer you are proposing of what will now be an investment property would start the cgt clock ticking.

thanks

 

[Sushiboy]

Hi Raddles,

We're not divorcing, so can;t use that one.

As we're turning the PPOR into an IP, I assume that regardless of what we do, the CGT clock starts ticking, and I'm OK with that.

I just would prefer not to be hit with a CGT bill upon transfer.

Cheers,

sushiboy

 

[Raddles]

Hi there
you may wish to think about timing the transfer then - so the cgt falls into a different tax year
thanks

 

[Milan]

Have the same situation.

Are there State differences? My wife and I have 50/50 ownership or our ex PPOR in Queensland which is now an IP. I am currently trying to find out if we would be liable for Stamp Duty on the transfer to 100% in my name (My wife is not currently working).

Was not aware and had never considered CGT issues.

M

 

[Sushiboy]

Advice I received was:

1. SD not applicable if transfered between my wife and I for "love and affection" and no other party will receive a benefit (stat dec required).

2. CGT not triggered as long as the house whose title is being transfered is the PPR or the transfer occurs within 6 months of moving out of the PPR.

I live in Vic, BTW - YMMV.