I am thinking about some strategies for tax minimisation, etc...
Scenario here:
- I purchase 6 blocks of land (ABC Pty Ltd ATF Mr ABC Property Trust) for $250k each, total $1.5mil.
- I contract a builder to build 6 houses for $350k each, total $2.1mil.
- Combined cost (excluding costs, stamping, etc) for each house in $600k.
- My strategy is to sell 5 to pay down the 6th.
- Each of the 5 houses sell for $700k of which I gross $100k profit each, being a $500k gross return
Being that I haven't kept each dwelling for more than a month and none are my PPOR, would it be fair to say that:
- All 5 will attract CGT.
- The smartest thing to do (Being I am on a gross wage of $80k PA), distribute that $500k to the company and pay 30% tax, leaving me with $350k cash.
- Use the $350k cash to pay the 6th loan down to $250k. (I am under the impression that ABC Pty Ltd ATF Mr ABC Property Trust can own my PPOR being the 6th)
Please correct me if I am wrong, in this instance. I would presume also that they 6th property being my PPOR for 12 months will not attract any CGT on its sale.
If the builder offered to build me 5 houses for $2.1 mil (or $420k each) and build the 6th for free, how would I go CGT wise?
This was something that occurred to me today, however I am sure this has a very quick simple answer that has been discussed here before.
Knowing the above scenario, can anybody suggest any ways that I can improve on this, both tax wise, security wise and profits wise.
Thank you so much,
Scenario here:
- I purchase 6 blocks of land (ABC Pty Ltd ATF Mr ABC Property Trust) for $250k each, total $1.5mil.
- I contract a builder to build 6 houses for $350k each, total $2.1mil.
- Combined cost (excluding costs, stamping, etc) for each house in $600k.
- My strategy is to sell 5 to pay down the 6th.
- Each of the 5 houses sell for $700k of which I gross $100k profit each, being a $500k gross return
Being that I haven't kept each dwelling for more than a month and none are my PPOR, would it be fair to say that:
- All 5 will attract CGT.
- The smartest thing to do (Being I am on a gross wage of $80k PA), distribute that $500k to the company and pay 30% tax, leaving me with $350k cash.
- Use the $350k cash to pay the 6th loan down to $250k. (I am under the impression that ABC Pty Ltd ATF Mr ABC Property Trust can own my PPOR being the 6th)
Please correct me if I am wrong, in this instance. I would presume also that they 6th property being my PPOR for 12 months will not attract any CGT on its sale.
If the builder offered to build me 5 houses for $2.1 mil (or $420k each) and build the 6th for free, how would I go CGT wise?
This was something that occurred to me today, however I am sure this has a very quick simple answer that has been discussed here before.
Knowing the above scenario, can anybody suggest any ways that I can improve on this, both tax wise, security wise and profits wise.
Thank you so much,