CGT and the family home

The rules around the CGT exempt for the principal place of residence is one which can trip up the most well planned structures.

Asset protection generally means that the family home may not be owned individually, this can mean that the general concessions may not apply, and there may be stamp duty consequences where the property is transferred out in order to access the CGT concessions.

A different consideration is where the property has been rented out for a period of time, this can mean a portion of the sale proceeds are captured under the CGT provisions.

A complex consideration, and one we are seeing more often is where the ATO believes that the property was actually trading stock and that rather than being a CGT exempt item is actually a business asset and that it will be taxed as normal income on sale, this is happening where people buy and sell the family home regularly and it looks as though it is a trading business.

There are structures and planning strategies which can be put in place to ensure that you are able to protect your CGT concessions, speak to us at 1300 ADS LAW for more details.