The state of the economy at the street level

[wayneL]

Can you use some sort of family trust setup which can defer transfer of ownership until you kick the can?

Disclaimer: I know SFA about these things.

 

[Captain_Chaza]

How do you write up a Budget with an anticipated Iron Ore price of `~$ 60
when it is ~$135 at the moment ?

 

[JohnDe]

In which way is this unfair? Seriously?
Allowing fake sale at artificial price would be an absolute scam.
Sell full price , pay the due taxes as everyone does and gift the money or some of the money to your daughter if you will.
I am no friend of the ATO here but really?

I could sell it for full price on the open market, but that’s not my intention. I just want to help my kids out by selling it at a fair price. What is unfair is the government and tax system telling me what price I must sell it for.

 

[JohnDe]

Can you use some sort of family trust setup which can defer transfer of ownership until you kick the can?

Disclaimer: I know SFA about these things.

Most likely, but it complicates many things. We did the same for my son, but the prices have increased significantly and ridiculously in our area. Lots of cashed up interstate and overseas buyers are pricing our kids out.

 

[mullokintyre]

Most likely, but it complicates many things. We did the same for my son, but the prices have increased significantly and ridiculously in our area. Lots of cashed up interstate and overseas buyers are pricing our kids out.

Nah mate, your just dodging tax.
Sell it, then go buy another property with her name on the title.
Mick

 

[JohnDe]

have you been utilising a discounted "family rate" depreciation schedule, or maybe holding back a bit on the interest claimed against your tax (gearing ), all along?

Seeing the financial advisor tomorrow, fingers crossed

 

[JohnDe]

Nah mate, your just dodging tax.
Sell it, then go buy another property with her name on the title.
Mick

Im genuinely confused by your statement. I’m only dodging tax if I make more money than I claim. In this situation I’m selling to my daughter for fair value, if you think that it’s ok for government to tell us what we must sell for I am flabbergasted.

I suppose you’re also fine with a death tax, the theory is fair enough. After all, if you’re dead why do you need the wealth that you have accumulated? And our partner will have more than enough to live on.

 

[mullokintyre]

Im genuinely confused by your statement. I’m only dodging tax if I make more money than I claim. In this situation I’m selling to my daughter for fair value, if you think that it’s ok for government to tell us what we must sell for I am flabbergasted.

I suppose you’re also fine with a death tax, the theory is fair enough. After all, if you’re dead why do you need the wealth that you have accumulated? And our partner will have more than enough to live on.

Yes I am fine with a death tax, I'm fine with Capital gains on family homes, and paying GST.
You complain that the CGT is calculated on the market value, in other words you want to pay less tax.
get over it.
Mick

 

[JohnDe]

Yes I am fine with a death tax, I'm fine with Capital gains on family homes, and paying GST.
You complain that the CGT is calculated on the market value, in other words you want to pay less tax.
get over it.
Mick

That’s correct, I want to sell at a price that I judge to be fair and pay the CGT on that price, not the price that it has been valued at. I’m not selling it for $, I’m selling it at the same price that I sold a property to my son a few years back. Both my kids will be on a very large mortgage, I would have received a fair capital growth, and paid a generous tax bill.

Why is it ok for the government to tell us how much to sell our property?

 

[Country Lad]

Stamp duty has to be paid at market value and our capital gains tax also has to be paid at market value, even though the difference is hundreds of thousands of dollars.

I am a little confused by this. Unless things have drastically changed since I sold one, the capital gains tax is calculated on the market value at the date the house is first used to gain an income, not the sale price. To be sure, we had a market valuation done at that time. If you bought on market and rented it straight away, then that would likely be accepted as the market value at that time.
The stamp duty paid (in Qld) by the buyer was payable on the sale price. They wanted to do a fiddle with the sale price to reduce the stamp duty but we wouldn't come into that.

 

[Dona Ferentes]

seeing a good tax accountant or adviser with whom you have an established relationship is best. You will likely find your current view is untenable. But define market valuation, when related parties are involved. ... for ATO.

 

[JohnDe]

I am a little confused by this. Unless things have drastically changed since I sold one, the capital gains tax is calculated on the market value at the date the house is first used to gain an income, not the sale price. To be sure, we had a market valuation done at that time. If you bought on market and rented it straight away, then that would likely be accepted as the market value at that time.
The stamp duty paid (in Qld) by the buyer was payable on the sale price. They wanted to do a fiddle with the sale price to reduce the stamp duty but we wouldn't come into that.

That is true, and has been designed to stop people from rorting the system. But we are in the grip of ever increasing price rises, which are locking our youth out of certain markets. Why can’t an owner sell their property at a fair price for all?

Instead we have a convulsion of tax laws and regulations and loopholes to make it fair for all while grabbing enough tax to keep the country going. Tax that is spent with very little accountability, causing evermore to be found.

I’m looking forward to the next round of government superannuation changes.

 

[Country Lad]

That is true, and has been designed to stop people from rorting the system. But we are in the grip of ever increasing price rises, which are locking our youth out of certain markets. Why can’t an owner sell their property at a fair price for all?

Let us know what your financial adviser says if proper to do so.

 

[JohnDe]

seeing a good tax accountant or adviser with whom you have an established relationship is best. You will likely find your current view is untenable. But define market valuation, when related parties are involved. ... for ATO.

Yes, I know that there is very little that can be done and prepared to pay all that is asked of me.

I blame my upbringing, family come first, stay as close to family as possible, look after each other. I’m lucky to be the 3rd of 5 generations living in the same neighbourhood, I’ve ensured that at least one more generation will follow.

 

[qldfrog]

I could sell it for full price on the open market, but that’s not my intention. I just want to help my kids out by selling it at a fair price. What is unfair is the government and tax system telling me what price I must sell it for.

Because this is open rort..imagine I do a deal with John Brown , buy his IP house at 50% value, he claims capital gain-> losses...
Reduced stamp duties, commission RE agents etc..for me and I transfer some bullions or OS fund to his Cayman islands account.
Or transfer between companies trusts etc at will to avoid cgt
Anyway, you are cluey enough to see why it is definitively justified from a tax fairness

 

[qldfrog]

Note

Because this is open rort..imagine I do a deal with John Brown , buy his IP house at 50% value, he claims capital gain-> losses...
Reduced stamp duties, commission RE agents etc..for me and I transfer some bullions or OS fund to his Cayman islands account.
Or transfer between companies trusts etc at will to avoid cgt
Anyway, you are cluey enough to see why it is definitively justified from a tax fairness

I fully agree with your view about overall taxes in Oz and the way they get wasted ..

 

[Belli]

That’s correct, I want to sell at a price that I judge to be fair and pay the CGT on that price, not the price that it has been valued at. I’m not selling it for $, I’m selling it at the same price that I sold a property to my son a few years back. Both my kids will be on a very large mortgage, I would have received a fair capital growth, and paid a generous tax bill.

Why is it ok for the government to tell us how much to sell our property?

You are, I'm afraid, walking into tiger country. Arm's length transactions.

The top most dot-point

"Taxpayers may need a market valuation for many purposes, including:

• individual taxpayers transferring property or shares between related parties, such as family members"

Market valuation of assets | Australian Taxation Office

You must obtain market valuation of an asset when required by tax law. The valuation must be objective and supportable.

www.ato.gov.au

 

[JohnDe]

Because this is open rort..imagine I do a deal with John Brown , buy his IP house at 50% value, he claims capital gain-> losses...
Reduced stamp duties, commission RE agents etc..for me and I transfer some bullions or OS fund to his Cayman islands account.
Or transfer between companies trusts etc at will to avoid cgt
Anyway, you are cluey enough to see why it is definitively justified from a tax fairness

How is selling to one’s own child at a fair price a rort? A fair price is one where the owner receives fair compensation, the purchaser pays a fair price, and a fair amount is paid in taxes.

You are confusing a rort as in someone selling for full price but only declaring part by stating a much lower purchase price. This is illegal and impossible in today’s cashless economy (unless you’re a drug dealer).

I do not want to get rich though my children’s mortgage, I want to give them a helping hand by selling at a fair price for my retirement funds and for their capabilities.

 

[qldfrog]

How is selling to one’s own child at a fair price a rort? A fair price is one where the owner receives fair compensation, the purchaser pays a fair price, and a fair amount is paid in taxes.

You are confusing a rort as in someone selling for full price but only declaring part by stating a much lower purchase price. This is illegal and impossible in today’s cashless economy (unless you’re a drug dealer).

I do not want to get rich though my children’s mortgage, I want to give them a helping hand by selling at a fair price for my retirement funds and for their capabilities.

I understand but it is still a rort in the taxman or other citizens view, you sell under value, the difference being a non declared gift obtained on your side without paying due taxes.
Anyway. In short, you can not do that legally

 

[sptrawler]

I understand but it is still a rort in the taxman or other citizens view, you sell under value, the difference being a non declared gift obtained on your side without paying due taxes.
Anyway. In short, you can not do that legally

I don't know about the Eastern States, but in W.A if you sell to family the taxman is informed and it has to be sold at actual market value, the stamp duty is worked out on market value also.
Well that is what happened to me, whether money changes hands is another thing, but tax owing is calculated at market value.