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Lamby(Initiate)Initiate
24 Sept 2024

Hi, I have inherited with others a pre-CGT asset. The property was bought in the 1960s and the house on it was rebuilt. It has always been a rented property. The only records we have are of the DA approval in early 1984 and it was build sometime shortly after the approval. I read somewhere on the ATO website that if you have a pre CGT asset you don't need to keep records but now I can't find that article. I assume that is what happened here. Any suggestions on what we do as we are looking to sell.

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4 replies
708 views
4 replies

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Deb_ATO(Community Support)Community Support
26 Sept 2024

Hi @Lamby


This looks like it could get tricky. You won't need records unless you added a capital improvement after the CGT started.


Was there a contract to construct the improvements? Separate to the development application?


If there isn't you'll need to know the date the improvements began.


If it's all before the CGT began, you'll be good to go and won't have to worry about records.

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TobyJDodd(Devotee)Registered Tax Professional
24 Sept 2024

Hi @Lamby


For Pre-CGT assets your cost base is the market value of the property at the date of death.


https://www.ato.gov.au/individuals-and-families/investments-and-assets/capital-gains-tax/inherited-assets-and-capital-gains-tax/cost-base-of-inherited-assets


Toby


Lamby(Initiate)Initiate
24 Sept 2024

Thanks, but that was not my question.


I found this information:

If you acquired your property before 20 September 1985, it is exempt from capital gains tax (CGT). You do not need to keep records for CGT purposes unless you later add a capital improvement.

https://www.ato.gov.au/individuals-and-families/investments-and-assets/capital-gains-tax/property-and-capital-gains-tax/keeping-records-for-property#


There was a capital improvement after the property was bought in the 1960s. Do we need to prove that capital improvement was started before 20 Sept 1985. The only information we can find is the DA was approved in early 1984. Do we just say it was all pre CGT, which we know to be the case, but have no records.

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