The Sunday Mail (Queensland)
Need to downsize should not affect age pension
I am 73 years old and receive the age pension from Centrelink.
I live in an old house with a large garden. The house needs serious attention and I am unable to care for the large garden.
My query is this: Do I need to inform Centrelink I plan to sell the property?
Will my pension be reduced if I need to withdraw a lump sum to help pay for the new house?
You are certainly under no obligation to advise Centrelink of your intentions regarding your home.
You must tell them within 14 days of any changes that you make to your financial position, including when you move home. Your own home, or primary place of residence, is an exempt asset for Centrelink purposes.
Given that you find a new home to live in, and sell your existing home at the same time, there are unlikely to be any adverse implications from a Centrelink perspective.
If you are spending some of your current savings (or invested funds) to purchase the new home, this could mean you get an increase in your age pension income support.
This would depend on what level of age pension you are current receiving.
You could speak to a financial information services officer at Centrelink for information about any potential changes to your age pension income support before proceeding with the sale and purchase of a new home.
I am a self-funded retiree wanting to gift some shares to a family member via an off-market transfer.
Would the taxation department deem this to be a sale by me, or would the
recipient adopt my original cost base and date of purchase?
Also, do the same rules apply to shares transferred via a will?
If you transfer shares via an off-market transfer to a family member, you change the beneficial ownership of the shares.
This change of beneficial ownership is a trigger for a potential capital gains tax (CGT) liability for you, as the original owner of the shares.
The date of the transfer becomes the acquisition date for the new owner of the shares, and the share price on that day would be the cost base for their future CGT liability.
Shares transferred via a will are treated slightly differently, with the original acquisition date, and cost base, being inherited by the beneficiary of the estate.
This does not reduce any potential CGT liability, merely defer it.
I recommend you seek the advice of your accountant or a licenced tax agent to understand the exact implications of what you are proposing before actioning.
Brenton is a director and an authorised representative of Goldsborough Financial Services Limited. His advice should be considered as an opinion. Readers should consider engaging their own personal financial adviser. Questions and answers may have been edited for length.