Changes to Australia’s capital gains tax (CGT) rules are creating new uncertainty for people going through divorce or bereavement, particularly those transferring investment properties. In an article published by The Senior, Joshua Maloof, family law solicitor at Tiyce & Lawyers, highlighted the difficulties these changes may create for clients making major financial decisions at an already challenging time.
Joshua warned that the consequences of the new rules remain difficult to predict, leaving lawyers unable to provide clear advice about which tax treatment may ultimately be most beneficial.
“It’s not known how it’s going to play out … the consequences are really unknown.”
Under the new arrangements, divorcing couples and widows transferring certain investment properties may need to choose between the former CGT regime, which included a 50 per cent discount, and the new rules. Joshua explained that this decision may depend on factors that lawyers cannot predict, including future property prices, inflation and individual income.
“They will be making that decision based on factors we can’t advise on, like what the housing market might do, what inflation might do, and what their income might do.”
He also highlighted concerns for lower-income divorcees and single parents, who could potentially face significantly higher tax bills under the changes.
For anyone affected by the new CGT rules, Joshua stressed the importance of obtaining specialist financial and tax advice alongside family law advice.
“It’s really important to have a tax specialist, someone who’s very familiar with the area.”
Joshua’s comments highlight the increasingly complex intersection between family law, property settlements and taxation, and why people going through separation or bereavement should obtain individualised professional advice before making decisions about investment properties.
Want to find out what this means for your situation? You can book an obligation-free initial consultation with Joshua here >
Read the full article on The Senior here: https://www.thesenior.com.au/story/9333865/affects-still-unknown-for-divorcees-after-cgt-changes/
Featured image by Megan Dingwall / ACM
