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Where Taxpayers and Advisers Meet

CGT expenditure offset

Joined:Sun Jul 29, 2018 10:35 am
CGT expenditure offset

Postby al91 » Tue Sep 14, 2021 12:13 pm

I and two unrelated people own a share of a property. The property is leased out to a business and generates income for all three owners. There is a Declaration of Trust in place that simply states the percenatge owned by each parthner.

Throughout the our ownership of the property there have been two expenditures on this property. One was done by us and the second by the business owner, with our consent.

We are now thinking of selling the property and are trying to figure out the capital gains tax. Can we include the second expenditure, done by the business owners, to offset our capital gains or just our expenditure.

Basically, how would we calculate our capital gain tax?

Joined:Mon Mar 11, 2019 4:22 pm

Re: CGT expenditure offset

Postby Jholm » Tue Sep 14, 2021 1:42 pm

You wouldn't claim an expense that you did not incur. I imagine the business owner claimed that expense themselves (rightly depending on the facts) so the effect would be double relief if you were to claim it also.

Assuming the same owners have owned it from day one, then 1/3 split on proceeds and costs between each.

Joined:Sun Jul 29, 2018 10:35 am

Re: CGT expenditure offset

Postby al91 » Tue Sep 14, 2021 2:25 pm

Thanks for posting a reply...Thats what I had suspected but one of the partners had thought otherwise and so I just wanted to make sure. From my understanding, in this particular case, CGT is applicable to each partners 'individual' gain and that is what they would declare. Thanks again for the clarification.

Joined:Sat Feb 01, 2014 3:26 pm

Re: CGT expenditure offset

Postby bd6759 » Wed Sep 15, 2021 8:07 pm

The gain isn’t split 1/3. It is split in accordance with the ownership shares declared in the deed of trust.

It may be 1/3, but not necessarily.

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