Owner shares and CGT

[D_One]

What happens with the following situation. Person A and B owns a house and then decided to remove the existing property on a lot to build units to be strata titled.

Person A share on title: 99%
Person B share on title: 1%

What happens when the units built and strata titled. Does that mean that when this units are sold, 99% of the capital gains will be assigned to person A for CGT and 1% to person B?

 

[Peter_Tersteeg]

It could depend on the relationship between persons A & B.

I can't speak for the OSR, but lenders will look at it and say that person be is only on the title for a convinience reason and my not recognise their income as contributing to the affordability.

If the two people are married, it's not an issue as there's an intrinsic benefit for person B (and there's no need for that person to be on title at all for lending purposes). If they're not married, your finance process could be interesting.

 

[Terry_w]

What happens with the following situation. Person A and B owns a house and then decided to remove the existing property on a lot to build units to be strata titled.

Person A share on title: 99%
Person B share on title: 1%

What happens when the units built and strata titled. Does that mean that when this units are sold, 99% of the capital gains will be assigned to person A for CGT and 1% to person B?

generally yes.

 

[D_One]

Thanks guys, so for the flexibility of income distribution, this sort of situation should be in a trust.