There are a number of tax concessions and exemptions when it comes to transferring property from the name of one party to the other, or from joint names to one party’s sole name if the property is transferred as a result of a relationship breakdown. Two of the main ones are Stamp Duty and Capital Gains Tax.
- Stamp Duty
You can potentially save thousands of dollars in stamp duty if you have separated and seek to transfer or receive property (real estate, cars or shares) from your former spouse or de facto partner. How?
People are entitled to an exemption of stamp duty when a marriage or de facto relationship breaks down and because of the breakdown of this relationship a property is transferred. The property can be transferred from joint names to one party’s name, or from one party’s name to the other party’s name. Each of these transfers attracts a stamp duty exemption. In order to claim the exemption, you must document your agreement by way Consent Orders or a Binding Financial Agreement. You can get Court Orders through an Application for Consent Orders using Forward>>. through our website. - Capital Gains Tax
Like with Stamp Duty, the Australian Tax system provides for “rollover relief” for CGT when a property is transferred as a result of a relationship breakdown. This means that the transferor of the property will not have to pay CGT. This “rollover relief” applies when a property is transferred between two individuals. If a property is transferred from a company or trust to an individual, you should seek advice as to whether there are any CGT consequences. It is important to note, however, that the party who is transferred the property may be liable to pay CGT if (and when) the property that was transferred as a result of the relationship breakdown.
For more information about tax consequences as a result of your property settlement, give us a call here. Our lawyers can discuss your needs and goals with you and help you finalise your settlement agreements quickly and cost-effectively.
