Hey All,
I was speaking to a friend yesterday who was looking at subdividing their PPOR and developing a dwelling at the rear. They said what they were hoping to do is build it and just prior to completion sell their PPOR and move into the new dwelling for 1 year and then sell again.
There thought process is that they will be CGT exempt when they sell their current PPOR but also CGT exempt on the new dwelling after 1 year.
I asked if they had sought specific tax advice on this which they said their accountant had confirmed this was fine.
Now I could be wrong but I said to them I was not sure they would be. There existing PPOR they would be exempt no question (lived there for 5 years) but from my understanding if they then moved into the new dwelling and sold 1 year later, the ATO will look at this as there intention was always profit driven and they would be liable for CGT?
Also it was their accountant who advised 1 year. Again I am no guru but I thought the one year rule was simply for the 50% discount on a property. Claiming a PPOR the ATO never specifies a timeframe but more so rules around what is required (mail delivered for example).
I was speaking to a friend yesterday who was looking at subdividing their PPOR and developing a dwelling at the rear. They said what they were hoping to do is build it and just prior to completion sell their PPOR and move into the new dwelling for 1 year and then sell again.
There thought process is that they will be CGT exempt when they sell their current PPOR but also CGT exempt on the new dwelling after 1 year.
I asked if they had sought specific tax advice on this which they said their accountant had confirmed this was fine.
Now I could be wrong but I said to them I was not sure they would be. There existing PPOR they would be exempt no question (lived there for 5 years) but from my understanding if they then moved into the new dwelling and sold 1 year later, the ATO will look at this as there intention was always profit driven and they would be liable for CGT?
Also it was their accountant who advised 1 year. Again I am no guru but I thought the one year rule was simply for the 50% discount on a property. Claiming a PPOR the ATO never specifies a timeframe but more so rules around what is required (mail delivered for example).