Capital Gains Tax

October 2021 Newsletter

October 2021 Newsletter 1000 665 Website Admin

In this issue:

2021 has been, even more so than 2020, the year of working from home for so many of us – but what are the tax implications of using your home as a place of business? Turn to page 3 of our October newsletter to find out.

On the subject of homes, we also cover off what happens when multiple children inherit multiple rental properties – and how to solve the issue of co-owning a property with others. We’ve also got two articles on superannuation – our leading story examines the implications of compensation payments for super fund trustees, while on page 6 we outline the process for SMSFs having to use SuperStream from 1 October for certain contributions and rollovers.

Finally, October means that it’s almost that time of year again – Christmas, as your local supermarket will no doubt be reminding you soon – and our final story looks at the tax treatment of gifts and events in the workplace context.

‘Need to knows’ for October

  • The ATO is now closely reviewing arrangements where Australian resident taxpayers fail to declare foreign income and may conceal the character of the funds by disguising them as a purported “gift” or “loan” from a related overseas entity.
  • It’s also important to be aware of the CGT consequences of using part of your home as a place of business during the current pandemic – and the potential application of the CGT small business concessions to eliminate, reduce or roll-over any partial CGT liability that may arise.
  • In SMSF news, individuals who receive compensation payments from financial institutions and insurance providers may have the amount count towards their superannuation contribution caps, depending on the circumstances in which the payment is received.
  • Individuals can now recontribute amounts they withdrew under the ‘COVID-19 early release of superannuation program’ without them counting towards their non-concessional cap.

June 2021 Newsletter

June 2021 Newsletter 4256 2832 Website Admin

In this issue:

  • Cryptocurrencies, once again surging in popularity, have a unique tax treatment that every taxpayer dealing with cryptocurrency should be aware of.
  • The ATO has recently updated its guidance material on the operation of the personal services income (PSI) and personal service business (PSB) rules.
  • When you’re faced with a complex or high-risk question in tax or super, briefing a barrister can provide you with the expertise and perspective to help you move towards a solution with confidence.

Please contact us for clarification, or further advice, regarding any of the topics covered in this newsletter.

Click here to download the latest newsletter

April Newsletter 2021

April Newsletter 2021 5017 3345 Website Admin
  • It is possible to receive amounts that are not expected by the ATO to be included as income in your tax return. However some of these amounts may be used in other calculations, and may therefore need to be included elsewhere in your tax return.
  • The Australian Government has made changes to the ATO’s insolvency framework to help more small businesses restructure and survive the economic impact of COVID-19.
  • Most people think of retirement as a time to put your feet up and relax, but it can also be a time when pre-retirees and retirees alike actually need to flex the grey matter.

Please contact us for clarification, or further advice, regarding any of the topics covered in this newsletter.

Click here to download the latest newsletter

CGT exemption for two homes

CGT exemption for two homes Lanteri Partners

It is generally accepted that an exemption to capital gains tax (CGT) applies to the family home, or “main residence”, and the exemption usually applies for only one home at any given time. But there is a rule that allows for a taxpayer to have two main residences and still maintain that CGT-free status for both premises for a temporary period.

Known as the “six month rule”, this states that two properties can be claimed as a main residence at the same time where a taxpayer acquires a dwelling that becomes their new main residence before they dispose of the original. This is a sensible allowance for an overlap of periods in which a taxpayer can claim exemption from CGT for two properties — one newly acquired and one that is to be sold. Selling the old house may take longer than six months, but the CGT exemption only holds for that long. The Tax Office cannot extend this concession.

It is available for the earlier of; six months after taking ownership of the new house, or when you transfer ownership of the old house. However there are two prerequisites to qualify — the old house must have been your main residence for at least a continuous three months in the 12 months before transfer; and if it was not your main residence for any of that time it can’t have been used to produce income.

    X
    X