Life Interests Testamentary Trusts

THINKING OF BUILDING A GRANNY FLAT? THERE ARE CAPITAL GAINS TAX IMPLICATIONS

What is a granny flat arrangement?

A granny flat arrangement is a written agreement that gives an eligible person the right to occupy a property for life.

From 1 July 2021, capital gains tax (CGT) does not apply when a granny flat arrangement is created, varied or terminated.

When the CGT exemption applies

The exemption only applies to creating, changing or terminating a granny flat arrangement.

Granny flat interest

An individual has an eligible granny flat interest if they have a right to occupy a property for life under a granny flat arrangement.

A granny flat interest can be held in any type of property, provided it is a dwelling. This includes the owner’s main residence or a separate property. It is not restricted to what is commonly referred to as a ‘granny flat’.

The interest may be in part or all of the property.

Find out more at https://www.ato.gov.au/Individuals/Capital-gains-tax/Property-and-capital-gains-tax/Granny-flat-arrangements-and-CGT/

 

 

 

 

 

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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