Hi Guys,
I appreciate any guidance in advance.
I have a client that has a three storey Unit Complex , they purchased it Sept 2014 and they have been living in the top two levels since. Main purpose, PPR.
The bottom level has been rented for on and off say for 4.5 years in total. The first tenant was renting from March 2015 and there are gaps of 6 months here and there of it not being rented at all. While there was no tenant I believe they used the bottom floor for themselves.
My client is looking at selling soon and was under the understanding from a previous accountant that the 6 year PPR rule was available and thus have not CGT Issues.
My understanding of the legislation is that the property will be partially subject to CGT as they did not move out of the property.
This would be my rough calc with fictitious figures
Bought 2014 $800,000
MV at March 2015 (first rented) $900,000
Sold Sept 2021 $1,600,000
Floor space rented 30%
Total time available for rent 4.5yrs / 7yrs = 64.28%
Capital Gain = $1,600,000 – $900,000 X 30 % floor space X 64.28% time available for rent.
= 134,988 Gross, 67,494 Net, 50% share of net = 33,747 to be included in each of their tax returns as assessable income 18A ?
On the right track ?
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