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CGT question

Discussion in 'Accounting, Tax & Legal' started by Aimjoy, 19th Jan, 2008.

  1. Aimjoy

    Aimjoy Member

    13th Jul, 2007
    Central Coast NSW
    This is a CGT question on behalf of a sole surviving parent.
    Parents purchased 52 acres of vacant land (farm land - no buildings) in 1966.
    In 1982 built the family home on this land and lived there till 1996.
    In 1996 purchased a PPOR in Port Macquarie and lived there (retired) until 2001.
    Meanwhile the original family home on the 52 acre farm was tenanted from 1996 until 2001.
    Tenants were evicted in 2001 and parents moved back into the property for just less than 12 months. During this time they prepared the house for sale (some tenant damage) and also sub-divided off 7 acres of land to keep, which they have to this day. This left the original farm house and 45 acres (52 - 7) which was then sold at the end of 2001.
    The Port Macquarie house was tenanted for the period that the parents were in the farm house property preparing it for & effecting a sale.
    Then at the end of 2001 the Port Macquarie tenants were evicted and parents resumed living in their home there.
    Finally in 2006 Dad passed away leaving the PPOR in Port Macquarie and the 7 acres of farm land to Mum in her name only (both were previously in both names).

    Does any of this give rise to a CGT event?

    Thanks in advance.

  2. Rob G.

    Rob G. Well-Known Member

    6th Jun, 2007
    Melbourne, VIC
    Based just on the facts you have given, and unmentioned details might matter !!

    Land 1966 Pre-CGT asset, including the subdivided 7 acres.
    Farmhouse 1982 Pre-CGT asset.

    House: Provided occupied as soon as acquired it may have full PPOR exemption, having elected to treat it as the PPOR during the year it was rented as well. Whether joint tenants or tenants in common, if your mother uses it as her PPOR or sells within 2 years there should be no issue.

    BUT you should run it in more detail past your Mother's tax agent to be sure.