Hi,
Wife and I jointly purchased a property in Mar 2006, which we lived in until we moved out in Mar 2009 when we bought a new home to live in. The property purchased in Mar 2006 then became an IP in Mar 2009.
At that time, I transferred the IP from joint ownership into my name only, using natural love and affection (Victoria). Wife stopped working in 2009 to have kids and has not worked since.
I have a couple questions.
1. I'm in the top tax bracket. My wife earns zero income. I may transfer the IP back into my wife's name for natural love and affection, at which point she may choose to sell it. Are there any tax lines being crossed should she do so?
2. I'm aware of the six year rule and that the IP may be able to be claimed as our PPOR. Our current home is not used for any income producing or other taxable purposes. Is it possible to sell the IP and claim CGT exemption under the 6-year rule?
3. If we do claim the 6 year exemption from CGT above, and in the future sell our current home, will CGT be payable on the increase in value of our current home over this 6-year period should we come to sell it in the future?
Both the IP and our current home are similar in value (say 750K, the IP might be worth up to 800K). The IP would have risen by $80-160K in value subject to auction price over this 6 years. Our home would have risen by maybe $100K in value over a similar period.
Any advice or strategy welcomed.
Cheers,
Sushi
Wife and I jointly purchased a property in Mar 2006, which we lived in until we moved out in Mar 2009 when we bought a new home to live in. The property purchased in Mar 2006 then became an IP in Mar 2009.
At that time, I transferred the IP from joint ownership into my name only, using natural love and affection (Victoria). Wife stopped working in 2009 to have kids and has not worked since.
I have a couple questions.
1. I'm in the top tax bracket. My wife earns zero income. I may transfer the IP back into my wife's name for natural love and affection, at which point she may choose to sell it. Are there any tax lines being crossed should she do so?
2. I'm aware of the six year rule and that the IP may be able to be claimed as our PPOR. Our current home is not used for any income producing or other taxable purposes. Is it possible to sell the IP and claim CGT exemption under the 6-year rule?
3. If we do claim the 6 year exemption from CGT above, and in the future sell our current home, will CGT be payable on the increase in value of our current home over this 6-year period should we come to sell it in the future?
Both the IP and our current home are similar in value (say 750K, the IP might be worth up to 800K). The IP would have risen by $80-160K in value subject to auction price over this 6 years. Our home would have risen by maybe $100K in value over a similar period.
Any advice or strategy welcomed.
Cheers,
Sushi