(updated on Friday, April 05th 2019)
I’ve recently sold some land that I had owned for 12 years. Initially, this was bought with my ex-partner but I recently bought out her share and transferred the title into solely my name. Does this leave me liable for a capital gains tax (CGT)?
Our Experts Answer:
A CGT is just a Tax Working Group proposal at this stage, so there is no CGT as such currently on the legislative books. However, there are 10 provisions of the Income Tax Act that can apply so that when you sell a property you have to pay tax on any gain.
Although this property was owned for 12 years, my concern is that there is a possibility that when the property was transferred into your name solely, this could have triggered a reset of the bright-line clock. If the transfer into your name was regarded as a reset of the bright-line clock, then depending on when that happened, sale within two years or five years may be taxable under the bright-line rule.
At this point there is not enough information for me to be able to say that this did represent a reset of the bright-line clock. I urge you to get specialist tax advice so you know where you stand.
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