My wife and I recently purchased our PPOR and are in the process of sub-dividing her IP. We are planning on building a townhouse on the sub-divided block eventually. The current tenant has expressed interest in purchasing the remaining land (with existing house). My wife is pregnant and we will not be able to service both mortgages, so the proceeds of the sale will go to paying off our non-deductible debt (PPOR) and we will build the townhouse on the subdivided block when we are able.
• IP purchased for $229,000 four years ago
• Sub-divided and existing house sold (approx half the block) for $250,000
• Title of land in wife’s and father in law’s name. (We will put title of subdivided block in wife’s name)
• Father in law retired
Given the above factors, can anyone foresee any difficulty with CGT? Obviously we’ll have to apportion the cost base as only half the asset has been sold and both my wife and father in law will be liable for CGT.
Can anyone offer any suggestions as to how this could be better structured?
Thanks
• IP purchased for $229,000 four years ago
• Sub-divided and existing house sold (approx half the block) for $250,000
• Title of land in wife’s and father in law’s name. (We will put title of subdivided block in wife’s name)
• Father in law retired
Given the above factors, can anyone foresee any difficulty with CGT? Obviously we’ll have to apportion the cost base as only half the asset has been sold and both my wife and father in law will be liable for CGT.
Can anyone offer any suggestions as to how this could be better structured?
Thanks