Selling Unit, CGT and Satrting a Business ??

Hey Guys

My wife has been out of work for over a year now we are at the end of our savings , so need to off load a unit and have decided to start a business of our own . I have a question

Say we come out with $48k before CGT and we loan that stright to the business do we still have to pay the CGT in this FY 09-10 or pay when the money is returned ?

Does it count as income FY09-10 ?

We have been getting centrelink benifits while my wife has been unemployed and if we have to claim the money this FY we would owe a lot back and only walk away with $5k

Any ideas or advise ?

Cheers
Martin
 
Say we come out with $48k before CGT and we loan that stright to the business do we still have to pay the CGT in this FY 09-10 or pay when the money is returned ?

Hi, yes, CGT becomes payable at the time that it is incurred. Depending on whether you do your own returns or which accountant you use, you would have up until June 2011.


Does it count as income FY09-10 ?

Yes, as above.


We have been getting centrelink benifits while my wife has been unemployed and if we have to claim the money this FY we would owe a lot back and only walk away with $5k

Capital gains form part of taxable income so Centrelink will be interested. Keep in mind that if you held the property for over twelve months then you only add half of the gain to your taxable income.

Also the gain is based on sale minus purchase, then minus other costs. The loan amount is irrelevant so if you worked out the $48k figure based on cash results then the taxable amount may be different. Also keep in mind the ownership of the property and who will own the resulting gains as well.


Any ideas or advise ?

Talk to your accountant about tax planning before the end of the financial year. Not after it. They can't do much once everything is over and done with, can only plan before the end of the year is up. They might be able to find strategies to reduce taxable income before CGT becomes a problem.
 
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