Property Settlement: Capital Gains Tax & Stamp Duty

How to avoid paying Stamp Duty and Capital Gains Tax in your Property Settlement

If property such as land, houses or units are transferred pursuant to a Court Order or Consent Order, then you can be exempt from paying Stamp Duty on the transfer.

This is helpful where propery is being transferred from one spouse, or from both partners jointly, in to the name on only one of the parties.

It is possible for a future financial expense such as Stamp Duty, Capital Gains Tax or a Taxation liability to be taken into account as part of the property settlement division and an adjustment made, so that one party is not unfairly penalised financially.

Properties are often sold as part of a property settlement but it is also common that one spouse will buy out the other person’s interest.

These transactions can have financial implications that may affect one party only rather than both parties jointly if an adjustment is not made to counter balance the financial liability one party may be left with.

If the parties:

 

 

• enter into Consent Orders;or
• enter into a Binding Financial Agreement;
• or the Court makes an Order for the division of property;

then stamp duty on the transfer of the interest in the property of one spouse to the other, is able to be avoided.

Couples are able to avail themselves of Capital Gains Tax rollover relief, however specialist advice will need to be obtained to ensure this is able to occur.

Any Stamp Duty or Capital Gains Tax obligation, as well as the Taxation implications of property settlement can be considered as part of the property division and adjustments made to take into account any liability one party will incur in the future.

 

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