Transfer of property to spouse (VIC)

My wife and I have an IP shared 50:50, though with my wife now full time mother etc I'm seeking to move to 99:1 sharing arrangement for tax planning reasons.

I understand CGT is triggered (confirmed with ATO), which is fine and would be largely offset by IP deductions between the 2 of us.


Questions
What forms are required to effect the transfer? Is this a simple stat dec?
What other non CGT issues exist?
Are there valuable sources of advice / reading on the subject


Hawk
 
Hawk, your wife will effectively be "selling" you her share (except for the 1% she retains) of the property.

This will trigger:
1. CGT (as you already know)
2. Stamp duty for you to pay on the purchase
3. You will need to inform (and obtain permission of) an existing mortgagee and a mortgage insurer (if one was involved)
4. A solicitor/conveyancer would be able to co-ordinate all of that for you, along with informing the Land Titles Dept in your state.

Do your numbers and perhaps reconsider IF she returns to the work-force in maybe 5 years when the child goes to school. Even though she would be racking up lots of tax losses (if the IP is negatively geared now), when she does resume employment, she would be able to earn quite a lot and not pay any PAYG tax for some time on her earnings.
 
Transfer between spouse can be stamp duty exempt in Vic. The law is called love and devotion or something - do a search in the forum.
Seek the advice of property solicitor. I've done it when we got married and were juggling our exposure, its a great opportunity to fine tune your properties.
You will need an independant valuation, so depending on your situation you can either "seek" a high or low val....
cheers
pieman
 
Search for the term 'natural love and affection' - this process allows you to transfer property between spouses with no trigger for stamp duty. We did it when turning our VIC PPOR into an IP (did it the same time as buying new PPOR). Not sure if this is possible with an existing IP.

Your solicitor should be able to provide advice. The bank will need to agree to this if there is a mortgage and you'll need to do a stat dec.

Whole process I think cost us $160, including solicitor's fees and title office changes.

Just don't do it such that it obviously appears for tax minimisation.
 
Section 43 of the Victorian Duties Act (2000) contains the relevant exemption

43. Marriage and domestic relationships

(3) No duty is chargeable under this Chapter [Chapter 2, transfers of dutiable land] in respect of a transfer of
dutiable property from one person to another person, or from two people to one
of them, or from one person to themselves and another person if-

(a) the people are spouses or domestic partners of each other; and

(b) no other person takes or is entitled to take an interest in the
property under the transfer.


When you complete the T1 transfer of land form (in Vic) you can simply put "because I love her!" or words to that effect as the consideration, instead of putting a dollar amount.

However, what I don't know is if you can put a dollar amount as the consideration and still gain this exemption? I would presume so, but a quick call to the SRO is probably in order.

Cheers
Jonathon
 
Yes, if the motivation is deemed to have been for tax evasion you will get caught under the Part IVa catch all, so you had better think of a legitamate reason why you are making the change.
Of course you would need an audit to disclose this but anything is possible.
 
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