Capital gains tax: How a simple mistake cost this taxpayer $200,000 in inheritance

Money

Super & retirement

Income tax

Opinion

How a simple mistake cost this taxpayer $200,000 in inheritance

Good record-keeping has always been important when it comes to keeping on top of your tax affairs, and a recent dispute between the ATO and a taxpayer has demonstrated exactly why.

The taxpayer, one of four children, is set to lose 80 per cent of her inheritance because the tax office will not accept that she held the family home in trust for her parents.

Capital gains tax (CGT) legislation recognises that a property held by a trustee is considered the property of the beneficiary so can be covered by their main residence exemption.

However, the ATO decided that the daughter did not have enough proof that she held the house for her parents, further demonstrating the issue of t