Property ownership is still considered one of the most important achievements in an individual’s lifetime. Who doesn’t want to secure a roof over their heads? And parents, especially in this tough property market, may inevitably be asked to provide (or is some cases, offer) financial assistance to help their adult children get a foot into the property market. This could include offering to share property ownership with their kids. However, parents should consider any factors, including tax implications, in weighing their decision to provide such help.<\/p>\n
In a recent decision before the Administrative Appeals Tribunal (AAT Case [2013] AATA 664, Re Gerbic and FCT<\/i>, handed down on 17 September 2013), an individual (a father) was unsuccessful in arguing that capital gains tax (CGT) should not apply to him as he was only holding an interest in a property (a town-house) to protect his inexperienced son from selling it on a whim. The individual had purchased the property for his adult son to live in and transferred the property to himself and his son as joint tenants. After living in the town-house for a few years, the son moved out to another property. The property was then sold and the entirety of the funds was used to pay-down the mortgage on a new property. The individual argued he received no proceeds from the sale and that he held an interest in the property in trust for his son, or alternatively, an exemption under the CGT law should apply. The Tribunal did not accept the arguments and held that as a joint tenant, the individual was liable to CGT for 50 per cent of the net capital gain on the sale.<\/p>\n
This case highlights that although parents may want to help their children and protect their investment, if a parent wants to share ownership with their children, they need to identify what tax implications could occur, and especially in the event the property is sold.<\/p>\n","protected":false},"excerpt":{"rendered":"
Property ownership is still considered one of the most important achievements in an individual’s lifetime. Who doesn’t want to secure a roof over their heads? And parents, especially in this…<\/p>\n","protected":false},"author":12,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[1],"tags":[94],"insight_job_role":[1315,628],"insight_practice_area":[],"class_list":["entry","author-lisalynch","post-656","post","type-post","status-publish","format-standard","category-uncategorized","tag-capital-gains-tax","insight_job_role-barrister","insight_job_role-solicitor","hentry"],"acf":[],"yoast_head":"\n