What are the capital gains tax implications

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Reference no: EM133389188

Case Study: Several years ago in January 2020, the company's CEO, Henry Jones purchased a house in the Southern Highlands which he only makes available for use by his nephew Sam, and Sam's family.The purchase price was $3 million and Henry Jones was required to pay $230,000 stamp duty on the transfer. He borrowed money from a bank to fund the purchase price and paid $400,000 in interest on the loan. In February 2022, he also paid $70,000 to a builder to renovate the bathrooms. In addition he paid $50,000 in legal fees to make an objection blocking a proposed development nearby which would have obstructed the house's charming countryside views. On 7 June 2022 Henry Jones entered into a contract of sale of the property to a third party at the market value of $4 million. Settlement occurred in August 2022.

Question: What are the capital gains tax (CGT) implications in relation to the sale of the Southern Highlands house (Australian Tax Law implication, please referring to relevant law, regulation and cases)?

Reference no: EM133389188

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