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Tax treatment of valuation fee incurred for Division 7A purposes

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My friend's marital property settlement was finalised last year.

As part of this, an investment property was transferred from the family trust to one of the ex-spouses.

Though this property obtained marital roll-over, a market valuation was required to determine the market value at the time of transfer. The cost of this valuation was paid by the two ex-spouses 50/50.

This was to assist in the parties providing market value consideration for the property so no Division 7A consequences arose from the transfer, due to the property being owned by a trust with a UPE to a private company (messy!!).

Is the cost of this valuation able to be either:

- added to the cost base of the property transferred; or

- deducted as a cost of managing their tax affairs.

Would the answer be different if the property was not subject to the marital roll-over so a taxable capital gain arose on transfer of the property?
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Most helpful response

Community Moderator

Replies 1

Hi @TaxRulz,

 

The cost would be a second element of the cost base.

 

Just waiting on confirmation that it would be the same whether it was a marital roll over or not.

 

Will keep you posted.

 

KylieS

3 REPLIES 3

Community Moderator

Replies 0

Hi @ TaxRulz,

 

Interesting question, we will check it out.

 

KylieS

Most helpful response

Community Moderator

Replies 1

Hi @TaxRulz,

 

The cost would be a second element of the cost base.

 

Just waiting on confirmation that it would be the same whether it was a marital roll over or not.

 

Will keep you posted.

 

KylieS

Community Moderator

Replies 0

Hi @TaxRulz 

 

The marital roll-over does not change the outcome.

 

The transferee spouse would add the amount they contributed to the cose base.

 

KylieS