married couple, title in single name, what options for splitting up investment income

[thydzik]

Hi

I am in the following situation, married with property title in my name, currently being rented.

When it comes to tax time, how does it work,
Do I have to declare the property in my tax return?
It is a 50/50 split and we have to declare half of everything in each of our tax return?
We have to option to split it as we like (ie 20/80) and declare as appropriate?

Insight welcome,

Thanks,

Travis

 

[Propertunity]

It is 100% yours thydzik. It goes into your tax return.

You get the income, you claim the expenses including the depreciation etc.

If it is negative geared (i.e. expenses exceed the income) you might want to reduce your tax on a weekly basis by filling in a variation with the ATO rather than wait 1 year for a tax refund.

 

[thydzik]

Propertunity, thanks for that.

 

[thydzik]

follow-on question;

if the title is in two persons name, is the tax split 50/50, or can you chose the split?

 

[Aaron_C]

If it is a joint title you split it 50/50.

 

[thydzik]

Aaron_C, thanks for the quick reply.

I am assuming the only way to chose the split would be to have the property in some kind of trust?

 

[Propertunity]

No, you can purchase the property initially as tenants in common in either equal (50/50) or unequal (99/1, 70/30, etc) shares.

Now that you own the property you could 'sell' a % of it to your wife. This may trigger a CGT event and/or the payment of stamp duty. You'd need to seek accounting and legal advice before doing this.

 

[wobbycarly]

follow-on question;

if the title is in two persons name, is the tax split 50/50, or can you chose the split?

No, you can purchase the property initially as tenants in common in either equal (50/50) or unequal (99/1, 70/30, etc) shares.

Now that you own the property you could 'sell' a % of it to your wife. This may trigger a CGT event and/or the payment of stamp duty. You'd need to seek accounting and legal advice before doing this.

Like Prop said, if it's "Tenants in Common", the %age split will be recorded. "Joint tenants" is, by default, 50% ownership.

Depending on the laws in your state, you may be able to transfer free of stamp duty (but you cannot avoid CGT, unless there's none to pay!)