Taking up a power of attorney for/or financially assisting an older relative


Taking up a power of attorney for/or financially assisting an older relative

The tax implications of assisting or taking over the financial affairs of an older relative can be quite tricky, particularly if shares or investment properties that were purchased many years ago are involved.

The market value of some shares e.g., banks or resource stocks have, in some cases, increased quite substantially and lately the property market has also been somewhat volatile.

Selling shares due to necessity, sometimes at short notice, to provide funds for care and/or accommodation is often seen as a quick solution. This can present a problem when it comes time to prepare the person’s tax return as the possibility of capital gains had not been considered and the amount of gain could be considerable.

These days the ATO is notified about share sales – details of the entity, date of sale and the proceeds realised.

However, to work out the capital gain, the original purchase price and date of purchase, including any subsequent Dividend Reinvestments, is required; as is any notifications of company mergers/demergers, schemes of arrangements, share conversions and bonus share allocations.

Whilst the sale of an investment property will take more time to complete, purchase details are still needed e.g. original purchase price, stamp duty paid, legal and conveyancing fees, details of any major additions or renovations.

Getting the information, possibly squirrelled away, is not always easy, so the more that can be obtained from your relative is beneficial all round.

Where the details cannot be found, other avenues will need to be explored and, in such cases, we would be able to provide assistance.