I’m aged 85, single and retired, and want to supply for my solely youngster, who’s single and on a incapacity help pension. My belongings embrace my residence, valued at $1.7 million, shares value $60,000 and superannuation of $10,000. I get the total single age pension of $987.60 a fortnight ($25,678 a 12 months). That is inadequate for me, and I’ve been promoting my shares. My choices appear to be: 1. Downsize. This may price about 2 per cent in gross sales fee, plus advertising and marketing prices. Then, to purchase one other property, I might pay stamp responsibility of 4.3 per cent on the acquisition value, and likely a strata levy, whereas I may additionally lose some or all of my age pension. 2. Entry fairness in my residence below Centrelink’s Dwelling Fairness Entry (HEA) scheme, or related. What are your ideas? G.W.
Concerning your two choices, I might favour accessing your property’s fairness below Centrelink’s HEA scheme.
Nonetheless, if offering to your youngster is an instantaneous precedence, you might take into account a land-lease group, whereby you promote your property and purchase a smaller residence in an property, with out paying stamp responsibility.
Costs may be lower than $400,000, however all the time verify their charges. Some don’t have any exit or deferred-management charges, whereas others don’t.
That might depart you with sufficient cash left over to put as much as $500,000 in a Particular Incapacity Belief to your youngster, which is the utmost gifting concession allowed with out affecting your age pension.
Your youngster may then declare an assets-test evaluation exemption of as much as $724,750 (listed every July).
You lately coated the query of capital beneficial properties tax after dying when belongings cross on to non-residents. Two of my three kids beforehand lived abroad and, had I died on the time, CGT would have been payable by the property on their inheritance, and my Australian-resident third youngster would have been deprived. So, my solicitor added the next clause to my will: “Ought to the legal responsibility for such tax come up because of the switch of any asset from my property to a tax-exempt and/or non-resident beneficiary, such beneficiary shall pay to my trustee the assessed quantity of such tax previous to any such asset switch or comply with an equal discount in his her or their entitlement to my property of the assessed quantity of such tax.” J.H.
Thanks for that, it could help others in related conditions.