Protecting Your Home From CGT

$25.00 (inc GST)

    This spreadsheet guides you on all the CGT records you need to keep for a property that may qualify for you main residence exemption.  In these days of such high inflation making the most of your CGT main residence exemption is more important than ever.  If you own more than one property that you have lived in at some time then keep records for them all so that when it comes time to sell you know which one has the highest capital gain and the dates you can cover it with your main residence exemption.

      Don’t just assume your home is going to be protected from CGT by the main residence exemption.  There are traps that will expose it to CGT such as using it to produce income.  Yes, even just renting out a room.  If you sell the house while you are living overseas you will lose the main residence exemption completely for the whole time you owned the property, even if you have lived in it for over 30 years.

       There are tax strategies for choosing which property to cover with your main residence exemption.  If you have previously lived in your rental property section 118-145 will allow you to choose to continue to cover it with your main residence exemption for up to 6 years.  The period is infinite if the old home is not earning income for example has now become a holiday house.  If you keep records for both properties you give yourself the option of choosing to cover the property with the largest capital gain, or the one you intend selling in your life time, with your main residence exemption.  You do not have to choose which property until you sell one.


     Noel Whittaker explains this beautifully in his easy to read style, in this blog:

      This spreadsheet is designed by CGT guru Julia Hartman to help you keep the right records to minimise the CGT on the property you choose not to cover with your main residence exemption and also allow you to estimate the best property to cover with your main residence exemption.   The biggest tax saving tip is good record keeping.  This spreadsheet sets it all out in front of you with a facility to link each entry to a scanned document.  This is also a brilliant tool to start to get your affairs in order for your executor.  The work pays a great hourly rate, not only will it save you CGT but also Accounting fees.  Though of course you must get an Accountant to review your work before you lodge the relevant tax return.

     It is not too late to start, every single entry you can make will make a difference.  The spreadsheet will help you know what is relevant, everything you need to know is clearly on the sheet in front of you.  Start by duplicating the spreadsheet, keep a spare template then do a separate spreadsheet for each house that has potential to be covered with your main residence exemption.  There is no need to understand complex tax law or high-level spreadsheet functions.  The purpose of this spreadsheet is to guide you in what is relevant to record as well as keeping an electronic copy of all your documents.  Just a step-by-step process, with plain English instructions.

       What about your other assets?  If your shareholdings have a dividend reinvestment plan attached, each reinvestment needs to be recorded or CGT will be payable on a gain you didn’t really make.  Will your executor be able to get a hold of all this information in the event of your death?   Don’t leave the ATO a tip!  Before you buy this spreadsheet consider the full package of spreadsheets for all your asset available here   That includes this spreadsheet.  The complete set also includes a spreadsheet to include scanned copies of important records such as your will, passwords, birth certificate, periods of time you were a non resident etc.