Ask Paul: Can I get out of paying CGT and stamp duty?


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Q. I am 25 years old. A few years ago my parents went in with me to buy an investment property/potential place for me to live in one day.

Being a full-time musician with a great interest in finance (I got better grades in accounting than music but chose a music degree instead), I knew that setting myself up early would be essential for not only the longevity of my musical pursuits but for any financial speed bumps along the way.

This has been all well and good but my parents now want to sell their share of the property and put it solely in my name so that they avoid paying more income tax when the loan is paid off at the end of the year.

ask paul clitheroe stamp duty

Is there an easy, cost-effective way to do this? Or do we just have to put up with them paying capital gains tax and me paying stamp duty again? - Matt

A. Good work, Matt. I am very admiring of those who have the courage to follow their own path. Accounting would obviously have been an easy choice for you with solid financial returns.

Following your passion for music will be a lot more fun but I don't need to tell you the monetary returns will be patchy!

Here is the bad news. I have no words of wisdom for you at all.

I am delighted that you will own your own home, as you say it will help protect you from financial speed bumps.

Sure, I have seen expensive and complex schemes to try to avoid stamp duty and CGT but, to be frank, these are in my view tax evasion.

Tax specialists know far more than I do in this area but I believe your parents will be up for CGT and stamp duty. But the good thing is they will have made a profit, you will own a home and I suspect everyone, including the tax office, will be happy.

Good luck with your music career.

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Paul Clitheroe AM is founder and editorial adviser of Money magazine. He is one of Australia's leading financial voices, responsible for bringing financial insight to Australians through personal finance books, the Money TV show, and this publication, which he established in 1999. Paul is the chair of the Australian Government Financial Literacy Board and is chairman of InvestSMART Financial Services. He is the chair of Financial Literacy at Macquarie University where he is also a Professor with the School of Business and Economics. Click here to ask Paul your money question. Unfortunately Paul cannot respond to questions posted in the comments section. Please view our disclaimer here.
October 31, 2018 4.00pm

Hi Paul,

Vic SRO was offering stamp duty rebates for first home buyers with a low income but they may have gotten rid of it.


November 1, 2018 7.53am

Pay the tax and stay legal, you're in a better position than most people your age. Keep it simple.

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