Breaking Bad (Advice)

Hi Scott,Due to bad advice 20 years ago, my wife and I put the family home in a company name which she had tried to get off the ground as a small business. We still have the company because we believe that to close it and return the property to our names would trigger a massive CGT impost. We just go on paying ASIC fees and land tax every year, and when the kids inherit it, same thing. Is there any point to us seeing a solicitor about our plight? Or can you see any way out for us?Regards,

Phil

Hi Phil,

Holy smokes!

The ASIC fees and land tax aren’t the issue here - it is, as you suggest, your capital gains tax (CGT) bill.

I’m guessing your words about the business which you ‘tried to get off the ground’ mean it didn’t take off. Whether there’s a loss from that which might offset the gains on the house is something you could look into. The problem is that CGT will need to be paid one day (and to make matters worse, you won’t even qualify for the 50 per cent concession on CGT that individual investors get).

If you’re going to stay living in the family home, then you could always handball the problem to the next generation - that is, assuming your kids inherit your shares in the company, they could decide themselves what to do. This is one of those situations where a good accountant can help -- preferably not the same accountant who advised you to buy the house in a company name.

Scott