CGT and the family home: expats and foreigners targeted again
The Government has resurrected its plan to remove access to the main residence exemption for non-residents – a move that will impact on expats and foreign residents. Back in the…
The Government has resurrected its plan to remove access to the main residence exemption for non-residents – a move that will impact on expats and foreign residents. Back in the…
The family home of foreign residents and expats may be taxed if legislation before Parliament is passed by the Senate. If you are a foreign resident living in Australia or…
In recent years, the ATO has focused on trusts developing and selling properties as part of their normal business. When these developed properties are sold, some trusts incorrectly claim a…
The ATO has advised that it has identified some instances where lifestyle assets, such as artworks and collectables, are not being properly accounted for. They said that they want to…
A taxpayer’s claim that a related trust was entitled to the small business 15-year exemption* was rejected because a loan from his trust had to be included in the net value of his CGT assets.
It was agreed between the ATO and the taxpayer that the total net value of the taxpayer’s other assets in 2008 was $5.93 million.
The parties disagreed, however, as to whether an amount of $1.14 million shown as a loan in the 2008 balance sheet of the taxpayer’s trust should be included as an asset – the taxpayer claimed that he was “statute-barred” from recovering the loan by the Limitation of Actions Act 1936 (SA).
If it was an asset, then the net value of the total assets for the purposes of the small business exemption exceeded $6 million, and the taxpayers were not entitled to CGT relief.
Decision
The Federal Court held that any action by the trust against the taxpayer to recover the pre‑1998 loan would be an action to recover “trust property”, and the Limitation of Actions Act does not prescribe any limitation period in respect of claims of that kind.
Therefore, “the contention that the pre‑1998 loan was statute‑barred and did not have to be brought into account in the calculation of the MNAVT must be rejected”.
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