Life Interests Testamentary Trusts

MAIN RESIDENCE – EXEMPTION EXCLUSION

The main residence exemption is fairly well known, that is, capital gains tax (CGT) on your family home is generally exempt. However, if your property is over 5 acres you are likely to have to account for CGT, as the main residence exemption only applies to the first 5 acres. This is something to keep in mind if you have a ‘lifestyle property’ or are planning to buy one.

What to do about this?

  1. You will need a valuation for the land in excess of the first 5 acres when you:
    a.  Purchase the property, and
    b.  Sell the property
  2. If the land in excess of the 5 acres was used in the running of the business, small business capital gains concessions may reduce the gain depending on a number of factors, such as: how long the land was used by the business and the age of the owners.

For more information visit: https://www.ato.gov.au/Individuals/Capital-gains-tax/Property-and-capital-gains-tax/Your-main-residence-(home)/Home-on-more-than-2-hectares/

 

The content within these articles was correct at the time of writing. Please contact us for updated information and advice. 

We provide accounting and wealth management services to clients in Woodend, Gisborne and Macedon Ranges areas within Victoria Australia.

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