Change of shareholding prior to 01/04/2011

[jace the ace]

If an LAQC has only 1 shareholder (Husband 100%).
Currently the rental property would have approx $80,000 building depreciation to be recovered if rental is sold. Looking to sell after 01/04/2011.
Will changing the shareholding to 50/50 with his wife before 31/03/2011 create any issues.
If acceptable this would split the depreciation recovered allowing for it to be declared as income 50/50.
Both husband & wifes only income will be from a pension from 01/04/11.

[graemeh]

One issue you will face is the reason for the change in shareholding. If it is done for the reason you outlined then it is tax avoidance.

If the wife decided that as it was relationship property then half should really be in her name then that would be a valid reason for changing the shareholding

Make sure when you sell it you either include the values of chattels in your S&P agreement (at book value or below) or you have a chattel valuation done (and tell the valuer why you want it).

You don't want to be repaying depreciation on things like carpet that really have dropped in value.

[CJ]

Transfers in shareholdings in a LTC between spouses dont have tax implication in certain situations. May be worth investigating.

Agree tax avoidance will need to be considered but the rule changes may give you options to make changes that would otherwise be avoidance.