Ep90: Geoff Gartly - The Best Tax Strategies When Inheriting the Family Home

Inheriting property can be a rollercoaster of emotions. There is the grief of losing a loved one, there is the joy of potentially reducing your debt. There are family members who believe that they are entitled to more, there are family members who come out of hiding, and there are wills that can change how family members see each other. And on top of it all, there is the possibility that the government will want a slice of the pie too. Today, we are going to find out how you can implement some great tax strategies when inheriting a family home. 

Geoff Gartly from Gartly Advisory in Ormond has over 35 years in experience helping small businesses, large businesses, families and those starting out with their accounting and tax strategy needs. 

1. What happens when you die and the taxes that you leave behind?

2. What is capital gains tax and how does it relate to deceased estates?

3. What is the cost base vs the market value?

    a. When would it apply?

    b. How is capital gains tax applied?

    c. What is the two year rule?

4. At what point should a Power of Attorney step in if:

    a. Mum and/or Dad are in a retirement home and their principal place of residence is left vacant?

    b. If the property was the deceased principal place of residence at the time of death?

    c. What happens if the property is owned as a joint tenancy?

    d. What happens if the property is owned as tenants in common?

5. First scenario - What are the tax implications when one party buys the other parties out after inheriting a home? What is the best tax strategy to minimalist the tax component?

6. Second Scenario- What are the tax implications if the property gets sold to an external party, and divided evenly between those who inherited the property? What is the best tax strategy to minimalist the tax component?

    a. Will the costs associated with selling the property reduce the capital gains tax?

7. Third scenario- What if all the parties agree to rent the property out? What taxes could be involved, and what would be the best tax strategy for all parties?

    a. Is any income from the property subject to income tax?

    b. If it is rented out for either a short period of time- say 12-24 months, or even a longer time (10-15 years), would the property be subject to capital gains tax?

    c. At what point, is the property put into the names of those who inherited the property rather than remain in the name of the deceased?

8. Fourth scenario- Would you advise to put the inherited funds into your superannuation to minimise tax?

9. Fifth scenario- What happens if it's the family holiday home, what's the best tax strategies for the family?

10. If you were to inherit a property, how would you choose to minimise your tax, yet maximise your net worth?

11. But for some, it's not about the money, it's more about the emotional ties - some just don't want to go through the memories of the home, yet some want to hold onto it.

 

Contact Geoff Gartly on by email at: geoff@gartlyadvisory.com.au

or head to the website:  https://www.gartlyadvisory.com.au

 

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