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	<title><![CDATA[Ask BAN TACS]]></title>
	<link>http://www.bantacs.com.au/QandA/</link>
	<description><![CDATA[Recent Questions Asked]]></description>
	<language>en-us</language>
	<pubDate>Fri, 18 May 2012 19:07:22 +1000</pubDate>
	<generator>AskPert - (c) 2005 W3matter LLC</generator>
	<managingEditor>savetax@bantacs.com.au</managingEditor>
	<docs>http://blogs.law.harvard.edu/tech/rss</docs>
	  
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		  <title><![CDATA[Asset Substitution and Investment Loans]]></title>
		  <description><![CDATA[Hi Julia,    I am currently living in my owner occupied home and I have several split loans against it which were used as a 20% deposit to purchase an investment   property and 2 more splits to fund the construction of an investment property. I claim tax deductions on these splits as the purpose of these loans are for investment purpose.    My situation is that we want to purchase another owner occupied property for us to live in and move into that property immediately  upon settlement. If we sell our current residential home and do a back-to-back settlement then we can do a so called asset substitution  and the investment loan splits would now be secured against another asset (our new primary residence). The new house is more expensive  and we will need to top up using my own funds or using the equity from another home.    I have been advised by a financed broker that the investment split loans will not be tax deductable as the purpose of the loans would be deemed to have changed to   purchase/acquire a (non tax deductable) new primary residence. However, my tax accountant argues that the purpose of the loans has not really changed as they are  still supporting the investment properties that are still producing income but the top up amount will not be tax-deductible.    Who is right and how can I make sure that the split loans remain tax deductable?    Cheers,  Peter]]></description>
		  <pubDate>Wed, 16 May 2012 15:41:55 +1000</pubDate>
		  <link>http://www.bantacs.com.au/QandA//index.php?xq=378</link>	 
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		  <title><![CDATA[gst and margin scheme]]></title>
		  <description><![CDATA[Hi  My wife and I signed up to build a rental property. We signed up to buy land and subsequent house on 28/8/10. At this time I was earning reasonable money.We took possession of house at end July 2011 .To save costs we were doing , or organised tradespeople, ourself to finish house. My work was looking a little less secure at this time so in between getting house finished and renting , we let my mate put the house on market for 3 weeks in case we had offer too good to refuse ho ho!!!!!. Anyway we finished house and continued with existing plan of renting.We had tenants take the house on 14/9/2011.    I got laid off mid November and have struggled for work since only picking up part time contracting work. Wife works but not full time. It is now a struggle to finance the rental house and Im looking at going back to college to help my job prospects.I would like to keep it because for what we built it for we could probably make quite well out of it in 5years. It is now just a weight around the shoulders at the moment.  We are looking to see if we can sell the rental without making a loss on our outlay.I have been told I may have to pay gst and can use the margin scheme...    My question........Is it correct I have to pay gst and what sort of amount would I pay on the rough figures mentioned below. Can I still get the 50% CGT rebate also.    Land    172500      with costs  180000  Build   171000      without interest payments over year    Rough sell price 390000     there would be about 8000 cost to sell    other info  If I sell total costs to me would be approx 370000 including everything ( interest and fees)  The house is in joint names  ( probably mistake after last tax return)  We are not gst registered  I have been self employed since february  thanks    ]]></description>
		  <pubDate>Thu, 10 May 2012 14:13:26 +1000</pubDate>
		  <link>http://www.bantacs.com.au/QandA//index.php?xq=377</link>	 
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		  <title><![CDATA[Starting a new period of absence from main residence]]></title>
		  <description><![CDATA[My wife and I bought a house in Sydney s joint tenants in September 2005, moved into it right away and lived there until August 2006, when moved to the USA. We have rented the house continuously since we moved, and expect to utilise the Absences rule in section 118-145. However we are approaching the 6 year limit.    We are not claiming a main residence exemption for any other dwelling.    If we move back into the dwelling before the 6 years, and then move out again, can we start another 6 year period? How long must we live there, and what other action could we take to re-establish it as our main residence?    We have been submitting Australian tax returns as non-resident for tax purposes for several years. Is it possible for our dwelling in Australia to be our main residence while remaining non-resident for tax purposes? Does one imply the other?    Say we continue to rent it out for 1 more year (7 in total), then move back in for 2 years, then sell it (owning it for 10 years in total). Will the capital gain be apportioned at 1/10th or 7/10th? Presumably also the cost base was involuntarily reset in August 2006 under 118-192.  ]]></description>
		  <pubDate>Tue, 08 May 2012 12:32:06 +1000</pubDate>
		  <link>http://www.bantacs.com.au/QandA//index.php?xq=376</link>	 
		  <guid isPermaLink="false">3fc91712120184b6581388ba1940e813</guid>
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		  <title><![CDATA[Claiming expenses]]></title>
		  <description><![CDATA[Can I claim costs associated with a property I am living in (such as capital improvements) if the property has previously been rented out? If so, what types and in what way are these expenses claimable (eg. added to the cost base for CGT purposes). If not, would it make a difference if we got quotes on (or even committed to doing) these works prior to moving in? ]]></description>
		  <pubDate>Sun, 22 Apr 2012 21:41:14 +1000</pubDate>
		  <link>http://www.bantacs.com.au/QandA//index.php?xq=374</link>	 
		  <guid isPermaLink="false">a7e28497e251ac00f32ea86bcdcffeb4</guid>
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		  <title><![CDATA[PPOR to IP with a positive Cash Flow]]></title>
		  <description><![CDATA[After 4 long years my wife and I decided to turn our PPor to an IP. The strategy was to rent cheaper and benefit from the rental income. Purchase Price: $450K, Loan Balance $183K, Rental Income: 32K per annum (excluding all expenses), Current Value:$530K    We recently purchased a 2 bed unit as an IP under a unit trust account.Purchase Price: 235K, Loan1: $188K, Loan 2 LOC: 50K, Rental Income: $15K (excluding all expenses)    Also placed a deposit on a block of land to settle in Oct 2012 @ $226K and currently seeking quotes from various builders to build the house with a budget of $260K. The completion will be in March next year 2013. This will also be purchased by the trust account.    I have structured our loan for all work income to be deposited into a with a redraw facility account attached to our home loan and all other investment Stand Alone loans attached to the LOC, where all rental income, property expenses and loan repayments to go to/from this LOC. I also attached a buffer to the LOC of $20K       Question: With our PPoR being positively geared, is the interest still deductible where the rental income be taxed no different than any other IP? In relation to tax it appears that I will be losing out on a fair when the land is purchased with no producing income for 5 months. Not to mention losing even more whilst entering a construction loan. Are there any suggestions you assist me in overcoming this? Any advise will be greatly appreciated.    .      Thank you in advance,       Adam          ]]></description>
		  <pubDate>Tue, 10 Apr 2012 16:49:51 +1000</pubDate>
		  <link>http://www.bantacs.com.au/QandA//index.php?xq=372</link>	 
		  <guid isPermaLink="false">3985231d56af72249fc0ed0e94c04eaa</guid>
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		  <title><![CDATA[capital gains and write off of building when demolishing rental property]]></title>
		  <description><![CDATA[Hi. I purchased a rental property in May 2009. It was 100% rented from that time to when it was demolished (cost to demolish $10,000) in May 2011. I have since built a new home on the land after the rental house was demolished.  I then moved into the home in November 2011 as my principal place of residence. My previous principal place of residence was sold in January 2011.    The rental house was purchased for $470,000 (inc of buying costs).  I have a Annual Land Valuation Notice with a Current Site Valuation amount of $320,000 in October 2010.    I have claimed $4804 in Building Allowance out of total $167,390.  I have read in ATO literature that I can claim the balance now that property has been voluntarily demolished.    Can you please advise on the capital gains issue and the claiming of the balance of the Building Allowance, Depreciation on Assets and Low Value Pool.    Thanks very much.  Danny Gray                            ]]></description>
		  <pubDate>Tue, 20 Mar 2012 16:18:42 +1100</pubDate>
		  <link>http://www.bantacs.com.au/QandA//index.php?xq=365</link>	 
		  <guid isPermaLink="false">f71e4e07c291b1b00473706bd4a62855</guid>
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		  <title><![CDATA[Double Tax]]></title>
		  <description><![CDATA[Hi Julia,  I am a Non-resident for tax purposes having lived in Japan for 10 years. I am in the process of being employed full time for a company in Sydney - working from Tokyo.  I will of course be taxed for income by the Japanese, my question revolves around potential tax issues on the Australian side.    Initially I will be employed as a contractor, not an employee. So, super etc wont come into play. Eventually though and likely next year, the company will want to put me on payroll - though I will still be based in Tokyo.    So, Are there tax issues on the Australian side for me working as a contractor or as an employee, while being based permanently in Tokyo?    Thank yoo.  Simon]]></description>
		  <pubDate>Thu, 15 Mar 2012 11:24:51 +1100</pubDate>
		  <link>http://www.bantacs.com.au/QandA//index.php?xq=364</link>	 
		  <guid isPermaLink="false">095c8430241359b54db1cd6eb09a4880</guid>
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		  <title><![CDATA[Subdividing rear block & building to sell]]></title>
		  <description><![CDATA[We bought a 910m2 subdividable duplex block with an old house on it (Perth suburb), we signed the offer in July 2009 and it settled in October 2009.  We planned to demolish and build a new PPOR  We did not rent out the property.  We demolished the old house in July 2010 and obtained a building licence to build one house on the block.  We positioned the home to the front and left enough room for future subdivision.  Before construction commenced in October 2010, we subdivided the block and attempted to sell the rear block.  It failed to sell, so we took it off the market.  We moved in to live in the front home as our PPOR in December 2011, as soon as it was completed.  Our previous home is now on the market after completing all necessary maintenance and redecorating.  We are now considering building a home on the rear block to sell on completion.  The plans have been approved by council.  The other alternative that we have is to sell the vacant block either as is, or with the approved house plans as a house &amp; land package.  If we proceed to build the house (to sell it on completion), do we need to register for GST, claim back the GST during construction and pay GST on the sale price?  If yes, I assume that we can we use the margin scheme.  Is the profit from this venture a capital gain or income?  OR is it capital gain on the land and income on the building development?    Alternatively, If we sell the block only (or with house plans as a house &amp; land package), is the profit a capital gain?    When we originally bought the block, we saw it as an opportunity to build a new home for ourselves and sell off the back block some time in the future.  We originally thought that we would be able to use the rear block to store our caravan and trailer, however we changed our mind when finances started to tighten up and our income dropped soon after we bought the property.    This is when we decided to try to sell the rear block.    Apart from the taxation issues, we believe that we would get a greater return by building the home as there are more buyers for this completed product than for a vacant rear block that requires vision and an understanding of what can be achieved on a rear block. There may be $50 - $80K more profit by completing the build.  We will also have more control over what gets built there.    The decision therefore may not be made just on the tax consequences, however we would like to know what our tax liability will be before we commence building the rear home.  We have not previously completed any similar developments in our own names.  We have however completed several developments under our family trust structure over the past 15 years.   We lived in our previous home which is now on the market, for 22 years.  ]]></description>
		  <pubDate>Mon, 27 Feb 2012 12:58:51 +1100</pubDate>
		  <link>http://www.bantacs.com.au/QandA//index.php?xq=362</link>	 
		  <guid isPermaLink="false">066607db59faed2dd2af42dff9cde3ec</guid>
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		  <title><![CDATA[Purchasing Investment property-Ownership structure]]></title>
		  <description><![CDATA[I am purcahsing investment property in Vic with view to build 2 units on site , retain original house.220,000  I already own one investment property in Vic with no debt but loan offset account also have 60,000 cash. Am holding this as principal place of residence though I currently work and live in QLD and will be here for 12 months more. I reoccupy old house every 6 years. Existing house I own site value 102,000. cap imp val 182,000.  New property site 99,000. cap imp val 187,000. I want to build units in next 18months with view to sell units retain house. Should I purchase under company name or in my own name for best tax outcome.  Thank-you]]></description>
		  <pubDate>Tue, 07 Feb 2012 07:31:28 +1100</pubDate>
		  <link>http://www.bantacs.com.au/QandA//index.php?xq=358</link>	 
		  <guid isPermaLink="false">948a4be0275c863fcf00a650a466a7af</guid>
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		  <title><![CDATA[Partnership building 2 residential apartments above a commercial property]]></title>
		  <description><![CDATA[Dear Julia,    A bit of background information to start off with:    &middot; A friend and I bought a single-story shop over a year ago fifty-fifty with the intention of building two residential apartments above it, one each. On completion of the build we aim to sell off the shop, or if that isn’t possible, rent it out.    &middot; We had to buy the shop as a ‘going concern’ as the current tenant was going to continue leasing for another 10 months. We were happy to lease out the shop for this time to offset the mortgage with rental income to some degree during the planning phase of the build.    &middot; We were advised to become a partnership to be able to look after the income and expenses of the shop during this period and also use it as a means of pooling our finances. Critically we also had to register for GST to enable the GST ‘free’ sale to go ahead associated with a ‘going concern’.    &middot; 12 months later and the lease has finished, the tenant has moved out (the shop is empty) and planning permission has been granted.    &middot; Note neither my friend nor I have bought or own a property before and are currently renting.     Our problems have started to arise once we delve deeper into the tax situation as we’ve recently been told that because we are currently an ‘enterprise’ (so we could run the shop while we had a tenant) we are effectively classified as developers regarding the building of the apartments above the shop and therefore will be hit with both GST and CGT (100%) in the future if we were to sell one or both apartments before 5 years. Is this correct, everything I have read on the topic seems to relate to either residential properties or commercial, but not both together as in our situation?     We purchased the shop with the intention of building ourselves an apartment each (with strata titles etc) and were of the belief that these would then be classed as our main residences. This was assuming that then after 12 months minimum the CGT would be halved and there would be no GST on any future sale.      What options are open to us to ensure that the apartments are treated as our main residences and not as a product of a business venture? For instance is there any way of separating ourselves from the business side of the shop with regards to the apartments perhaps? Would/should we de-register for GST now we’re not obtaining rent? Would that then be an issue with selling the shop in the future after the build, or perhaps renting it out again instead (based on the assumption we haven’t sold the apartments)? Obviously we wouldn’t be able to claim any GST credits during construction but that would be better than paying it on a sale.     Does the timing of sub-division make a difference in these situations? I.e. if we split the property titles before or after construction will it have an influence?    Thanks for your time and looking forward to your reply.    Kind regards,    Jon  ]]></description>
		  <pubDate>Mon, 06 Feb 2012 09:18:26 +1100</pubDate>
		  <link>http://www.bantacs.com.au/QandA//index.php?xq=357</link>	 
		  <guid isPermaLink="false">ae5300cc4c5b5d7eebc7e3db2a51937d</guid>
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		  <title><![CDATA[sub dividing land from a ppr]]></title>
		  <description><![CDATA[Background  We downsized 2 years ago and purchased a small, older cottage as our PPR on a large block of land with the intention of doing a renovation/extension. We spent lots of money on initial plans and a bushfire report as we adjoin a small area of bushland. With new building restrictions in force regarding bushfire prone areas, the cost of renovating/extending is exorbitant. We are now considering subdividing the block and selling off the front block. We will probably also sell the rear block (with the cottage) and move on. After reading the booklet How not to be a Developer I would like some further clarification.     1  Would the 50% exemption on CGT apply to the front vacant block as we have owned the whole block for 2 years or would we have to keep the vacant land for 12 months after the sub division is signed off by Council to gain this exemption    2   What cost base would apply for CGT calculations. The whole PPR house and land cost $480K 2 years ago and the sub divided land would sell for possibly $350K. Obviously the PPR would be worth slightly less on a smaller block now (still 900sq m). If we should get a valuation, at what point would we do this    3 Should the sub divided block be put in only my wife's name as she is not in paid employment. The current PPR is in both our names    ]]></description>
		  <pubDate>Fri, 06 Jan 2012 22:36:26 +1100</pubDate>
		  <link>http://www.bantacs.com.au/QandA//index.php?xq=351</link>	 
		  <guid isPermaLink="false">095a8228598a8853d487772f9502d6f9</guid>
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		  <title><![CDATA[Car Related Expenses]]></title>
		  <description><![CDATA[My wife works for Feros Care Ltd (ABN: 50 104 452 271) as a COmmunity Services Worker providing transport to aged clients and also travelling to their premises for in-home care.    We are copnsidering purchasing a second vehicle to be used 100% for my wife's work purposes.    As she will be using the vehicle effectively 100% for earning assessable income, would the running costs, interest payments on the loan and 'depreciation' (decline in value) fall under the otherwise deductible rule and therefore not be reportable fringe benefits if reimbursed by her employer?    I am basically relying on your mention of ID 2008/160 to allow the reimbursement to be made in installments as in the laptop case (notwithstanding that laptops are exempt items and I am relying on the 'otherwise deductible rule').     Also, I note that section 28.13(2)(b) of the ITAA 1997 includes decline in value of a car as a car expense. Would this allow the 'depreciation' or 'decline in value' of the car to be eligible to fall within the 'otherwise deductible rule'?    As stated in previous correspondence, this is mosntly to minimise the impact on Centrelink payments.]]></description>
		  <pubDate>Thu, 24 Nov 2011 10:33:33 +1100</pubDate>
		  <link>http://www.bantacs.com.au/QandA//index.php?xq=340</link>	 
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		  <title><![CDATA[Sale of family home by non resident]]></title>
		  <description><![CDATA[I am an Australian working in Hong Kong on a two year contract - non resident of Aus. We have rented out our family home since moving here in Feb however have decided to look at selling the property. Are there any CGT implications if we do this whilst a non resident?]]></description>
		  <pubDate>Tue, 25 Oct 2011 19:41:22 +1100</pubDate>
		  <link>http://www.bantacs.com.au/QandA//index.php?xq=334</link>	 
		  <guid isPermaLink="false">7d5b611bcc9f9f315837976a6514e93b</guid>
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		  <title><![CDATA[Can I become a non-resident for tax purposes?]]></title>
		  <description><![CDATA[At the end of July this year I commenced working as a consultant on a project in the Philippines. This is a fly-in, fly-out role (I worked the previous 18 months in a fly-in fly-out role in PNG).  I spend 20 full days working in Manila, with a travel day either side , then get 17 full days off back in Victoria.  At this stage I only have a contract until the end of the year, but I am likely to be offered one to extend into mid or the end of 2012. In reality I will be able to keep working on this project for several years.  I am not interested in moving to Manila to live. I will still need to come back to Australia for my breaks as my girlfriend lives with me in Melbourne. I own the flat that we live in and I also own a very basic coastal holiday shack and also own a car.    My question is would it be possible under this arrangement to become considered as a non-resident for tax purposes. I understand that in any case to achieve this I would need to sell/transfer registration of my car and rent out my house. What else would I need to do?  Would I still be able to come back to Australia regularly without losing non-tax residency status, including doing some consulting in Australia?    Regards    John]]></description>
		  <pubDate>Mon, 10 Oct 2011 20:59:09 +1100</pubDate>
		  <link>http://www.bantacs.com.au/QandA//index.php?xq=330</link>	 
		  <guid isPermaLink="false">c9eec4e1da13171f8142d2ed057e7833</guid>
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		  <title><![CDATA[Capital Gains on a deceased estate]]></title>
		  <description><![CDATA[Hi,  I am a Non-resident for tax purposes (Australian) having lived in Tokyo for over ten years. I inherited the family home after my mother passed earlier this year.     I have been renting it to a family friend and have made significant improvements to it - (around $36,000 Australian). The Family friend would like to purchase the house and I am wondering what Capital Gains Tax I would be liable for if any, and if there is any way to minimize it.     The property has a mortgage of around $165,000 and is valued at around $330,000.    (I was wondering if having the property as my primary place of residence would make any difference as I lived there since we built it in the mid 1990's, unil I left Australia. It is probably still my registered home as well.)     Thank you  Simon Chambers    ]]></description>
		  <pubDate>Mon, 26 Sep 2011 14:00:53 +1000</pubDate>
		  <link>http://www.bantacs.com.au/QandA//index.php?xq=329</link>	 
		  <guid isPermaLink="false">11a7c110fa77f0fc0e25f743ac4f734a</guid>
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		  <title><![CDATA[Tax implications on subdivision of a property]]></title>
		  <description><![CDATA[I wonder whether you would be able to help me with the following scenario?    A property was purchased in May 2010 for $755,577.  The property has a 3 bedroom house on it, which has been rented out since purchase.  The size of the land is 735 square metres.    The proposal is to subdivide the property, so that the 3 bedroom house plus garage is now situated on a site of 487 sq metres, with a new 3 bedroom townhouse to be built on the other section of 248 sq metres.    It is intended that the property containing the old 3 bedroom house will be sold after subdivision.    It is intended that the new 3 bedroom townhouse will be kept and rented out.    Would you please advise the capital gains tax implications on these transactions?    Would I need to get a Quantity Surveyor to determine the cost of construction of the “old” 3 bedroom house and any fixtures and fittings, so that I could then determine the value of the land attributable to the $755,577 purchase price?    Would I need to get a real estate agent to value both properties after subdivision, so that I may establish the cost of the land attributable to the property that houses the new 3 bedroom town house?  ]]></description>
		  <pubDate>Thu, 22 Sep 2011 17:21:39 +1000</pubDate>
		  <link>http://www.bantacs.com.au/QandA//index.php?xq=328</link>	 
		  <guid isPermaLink="false">974be2f5dd9a075b06e986a5c4c9c699</guid>
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		  <title><![CDATA[Marginal Scheme]]></title>
		  <description><![CDATA[Hi, my question is regarding marginal Scheme. I have bought a block of land in 2009 with no GST payable on the land, from a private indiviual.  Following that I have subdivided the block into 2 seperate Green Titles (both blocks identical in size)the subdivsion took 8months, after that I build 2 separate homes (1st home as Primary Residence where I live in now and 2nd home for sale off the plan)I had valuations done prior to building on each land with the 2nd block of land valued at $250,000.  I have registered for GST prior to building the 2nd home and have claimed GST credit Quartely from ATO on the building costs of the house, the cost of building was approximately $150,000 (2nd house), my question is if I sell the house for $450,000 will I be paying GST for the total amount (on $450,000 which will be $45,000) or am I elegible for Marginal Scheme or if not what prevents me form claiming Marginal Scheme? I have consulted few accountants but everyone is giving me different answers!  Many thanks for your help. Thomas]]></description>
		  <pubDate>Mon, 19 Sep 2011 14:08:50 +1000</pubDate>
		  <link>http://www.bantacs.com.au/QandA//index.php?xq=327</link>	 
		  <guid isPermaLink="false">aea49548dff1626d009d13c10dc94bb4</guid>
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		  <title><![CDATA[Main residence exemption - rent not derived - ownership interests apportionment]]></title>
		  <description><![CDATA[Dear Julia,    My husband and I are moving back to Australia in February 2012, when my current 3 year overseas work posting concludes. We have both remained Australian residents for tax purposes. My work involves an expectation of ‘regular’ postings throughout my career (for approximately 3 years out of every 6). My husband expects to find professional employment in whatever country we happen to find ourselves in future (which would presumably not be taxable income in Australia as it would be of the nature of wages/salary for work performed in another country).    We are in the process of buying our first home (in Canberra). We hadn’t planned to buy a house until closer to our arrival on Australian shores, but I couldn’t resist this particular property, which is perfect for our family. We will be Tenants in Common (while we are borrowing jointly, I will own 99% of the property, my husband the other 1%, mostly in order to protect our home from potential liabilities associated with his possible future professional/business activities). We have just exchanged (conditional) contracts (subject to finance) and expect settlement/completion to occur in the next 6 weeks.    Our intention is to move into the house immediately upon conclusion of my overseas posting (i.e., in around 5 months from now, or about 4 months from settlement). Because of my current posting, it is not possible for us to move into the house before then. We think that our return to Australia is thus the “first practicable” moment at which we can move into our new home (s 118-135 refers). While we will have the utilities immediately connected in our names, we would prefer not to leave the house empty for the next several months (for both security purposes and as we could arguably deduct substantial costs like [A.C.T.] stamp duty and loan interest costs in the event that the house were rented for the 4-5 months until our return to Australia). We have read the strangely worded AAT decision about taxpayers in a somewhat similar situation to ourselves being denied the relief offered by s 118-135 but note that decision may have relied on “rent being derived” to disqualify the taxpayers for exemption under s 118-135 (Caller &amp; Anor v FC of T refers).    We expect to travel abroad for my work postings again in future, at which time we would probably rent out the house and expect to rely on ‘the 6 year rule’ (s 118-145 refers). Given that we intend for this property to be our principal place of/main residence for at least the next 20 years, and could find ourselves renting it out for up to half of that period (i.e., by relying on consecutive applications of ‘the 6 year rule’), we don’t want to jeopardise our main residence CGT exemption (nor create an onerous requirement to keep records of holding costs associated with the property for the next 20+ years to apply to a CGT cost base in the event of only having a partial CGT exemption).    My questions then are:    1.	If we advertised our new home for rent for the 4-month period immediately after settlement until our return to Australia (at which time we move into our home), could we still rely on the protection/exemption available under s 118 135 and 118-145 (and simultaneously claim relevant deductions for the 4 month period) if:  a.	the house did in fact rent for that period (i.e., and rent was actually derived)?  b.	The house did not rent for that period, for example if no suitable tenants could be found (i.e., and no rent was actually derived)?  2.	If the answer to either or both of 1a. or 1b. is in the affirmative, could we deduct the entirety of the stamp duty in the current (2011-12) financial year (noting that it is a stamp duty on a lease as the property is in the A.C.T., but that the property would only be available to rent for a maximum of 4 months, not the entire year)?  3.	In addition to having the utilities connected in our names, would there be any benefit in having our furniture and belongings removed from storage and delivered into the house immediately after settlement? (i.e., and offering our home for rent as a short-term, furnished rental, inclusive of utilities).  4.	Will our decision to hold the property as Tenants in Common, with 99% of the ownership interest held by me and 1 % held by my husband, allow us to apportion revenues and deductions on the property when it is rented (in the short-term and during future postings) in those same proportions?  5.	Noting that we will deal with the treatment of our ownership shares in the property via our wills, are there any other taxation benefits or pitfalls to this proposed ‘99/1 approach’ of which we ought to be aware?       ]]></description>
		  <pubDate>Mon, 05 Sep 2011 08:58:44 +1000</pubDate>
		  <link>http://www.bantacs.com.au/QandA//index.php?xq=326</link>	 
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		  <title><![CDATA[PPR & CGT]]></title>
		  <description><![CDATA[Hi Julia,    Our situation is such, we purchased an old weatherboard home in April 2009 planed to build a stock home on it to move in and then sell our PPR to pay down the loan.  After engaged the builder, knocked down the weatherboard house in May 2009, we changed our mind in July 2009 to develop the block instead.  With lots of up and down, we had to sell our home last year in August 2010 and settlement took place in Jan. 2011.  We recently have the town planning permit to build 3 townhouses on it.  We plan to move into one ( call it Unit A), sell 1 and rent out the other once constructions complete, hopefully by end of 2012    While we've been renting since sold our home early this year, we have just purchased one, settlement will be in September 2011 (call it property B), we're planning to move in.  We however still participate in moving into Unit A once construction is completed in the end of 2012.    My question is, if we purchase the above property B and make it our PPR, once construction of the units are completed, we move into Unit A for a year before selling it, while property B is then a rental property.  Can we then claim Unit A as our PPR when selling the property or what would the tax implication be? .  And what if after selling Unit A, we decide to move back to live in property B again, what are the tax implications be on property B if we decide to sell it 5 years later.    With the above facts, what would be best for our situation, should we be better purchase property B as PPR or rental property if we would like to claim Unit A as our PPR for a year before selling it.    Thanks Julia!  Best regards,  Sharon]]></description>
		  <pubDate>Tue, 16 Aug 2011 16:07:36 +1000</pubDate>
		  <link>http://www.bantacs.com.au/QandA//index.php?xq=321</link>	 
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		  <title><![CDATA[An investment property changing to a PPOR, then being rented out again and then sold.]]></title>
		  <description><![CDATA[We have sold what was our PPOR and moved into one of our investment properties that we have owned for 8 years, during which time it was continuously tenanted.  We intend to live it the house for 1-2 years but will probably move out and re-let it for several years, then sell it.  While we are living in the house, we will undertake some renovations and refurbishment  using a  LoC for the costs.  My questions are:  1)	If we re-let it:  a)	Should we have a new depreciation schedule done to cover the upgrades?  b)	Is it correct that a new valuation isn’t needed when we move out?    2)	If we sell the property in say 7 years - having rented it for the last 5 of these years - am I correct in thinking that the CGT will be apportioned  ie it was rented for the first 8 years then was PPOR  for the next 7 years so CGT will apply to 8/15 of the gain?   And if we keep the house rented longer but don’t move back in after 6 years, will the eventual CGT still be apportioned to take account of the 6 years of being PPOR while rented?           3)	 I read in your book that it is important to keep a record of all ‘holding costs’ while we are living in it as these can be added to the cost base, but I don’t understand quite how this works.  What expenses does this apply to?   I assume that the costs of renovation and refurbishment, being of a “capital” nature, will be added to the cost base (and depreciated) but what expenses are classed as “holding costs’’?    And, if we don’t re-let it but live in it until we sell it, does this principle - ie increase to the cost base by adding all holding costs - apply to the whole time we live in the house?  ]]></description>
		  <pubDate>Thu, 28 Jul 2011 17:21:36 +1000</pubDate>
		  <link>http://www.bantacs.com.au/QandA//index.php?xq=314</link>	 
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