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Capital Gains Tax

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An older couple owning a rental property is intending to transfer a one half interest in the property to their daughter and her partner, who are both already living in the property. They are paying Capital Gains Tax on the transfer of the half interest. The four of them will then own the property as joint proprietors. 

 

Assuming the daughter and partner continue living in the property as their principal place of residence, if the property is sold in four or five years time, will Capital Gains Tax be applicable on the parent's half interest?

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Hi @shaheyfield,


Welcome to our Community!


As @macfanboy has advised if the parents still own 50% of the property they would be liable for 50% Capital Gains Tax (CGT) if the property is sold in the future.


Each partner who owns a proportion of a CGT asset uses their proportion to work out their capital gain or loss from a CGT event affecting the asset.


You can find additional information in our Guide to capital gains.


If you have further questions you can phone us on 13 28 61 between 8am - 6pm, Monday to Friday to speak with a customer service representative.


Thanks, SueO.
 

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Taxicorn

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The parents still own 50% so yes they will need to pay CGT on that.

 

Is it still a rental properrty?

 

Does the Daughter pay rent to parents?

 

 

 

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Most helpful response

ATO Certified Response

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Hi @shaheyfield,


Welcome to our Community!


As @macfanboy has advised if the parents still own 50% of the property they would be liable for 50% Capital Gains Tax (CGT) if the property is sold in the future.


Each partner who owns a proportion of a CGT asset uses their proportion to work out their capital gain or loss from a CGT event affecting the asset.


You can find additional information in our Guide to capital gains.


If you have further questions you can phone us on 13 28 61 between 8am - 6pm, Monday to Friday to speak with a customer service representative.


Thanks, SueO.