Sunshine Coast Region, Queensland
Tax Accountant in Kawana Waters
Two homes for a few months, and the interest the bank already told the ATO about
Individual tax returns for Kawana Waters households, and sole trader returns, from a CPA practice.
Kawana Waters takes in seven suburbs between Caloundra and Maroochydore: Birtinya, Bokarina, Buddina, Minyama, Parrearra, Warana and Wurtulla. Work on Kawana Island started in 1960, and the population of the broader Kawana area rose from 5,261 in 1981 to 22,593 by 2011. Households moving within those suburbs face a tax question when the new home settles before the old one sells.
Kawana Waters in brief
An estate named in 1968.
The name Kawana Waters became official on 1 November 1968, and Nicklin Way had opened in 1965. Rex Ingamells recorded Kawana as an Aboriginal word for wildflowers. Because it is not an official suburb, the ABS publishes no 2021 Census profile for Kawana Waters as a whole.
Three questions for households and sole traders
Buying the new home before the old one sells
Why it happens
A family buys another home and settles before the old one is sold.
Why it matters
You can treat both homes as your main residence for up to 6 months, if the old home was your main residence for a continuous 3 months in the 12 months before the sale, wasn't rented out in that 12 months when you weren't living in it, and the new home becomes your main residence. If the sale takes longer, only the last 6 months before the old home sells are exempt for both; for the earlier overlap you choose one home, and the other is subject to CGT for that time.
How we help
Diary the settlement dates of both homes and the date you moved.
Interest on savings and joint accounts
Why it happens
A household holds savings, an offset account or a term deposit in joint names.
Why it matters
Banks report interest to the ATO, which matches it against your return. For a joint account, declare only your share, half if it is held equally with one other person, and keep a note of how you worked out any unequal split. Tax withheld because no TFN was given is included in gross interest and claimed back as a credit in your return.
How we help
Give each bank your tax file number so nothing is withheld.
Sole traders paying themselves
Why it happens
A sole trader transfers a regular amount from the business account to the household account and calls it a wage.
Why it matters
A sole trader is the owner, not an employee, and can't pay themselves a salary or wage. Any such payment is treated as taking a distribution of profit, so it isn't a business deduction, and the business profit is taxed in the sole trader's own return.
How we help
Record transfers to yourself as drawings, separate from business expenses.
Frequently asked questions
Do I pay CGT if I own two homes in Kawana Waters while I sell?
Not for up to 6 months, if the conditions are met. Beyond 6 months, you choose which home is your main residence for the extra period.
Do I declare interest from a joint account in full?
No. Declare your share, half for an equally held account with one other person.
Can a sole trader pay themselves a wage?
No. Money taken out is a distribution of profit, not a deductible wage.
Where to next
Have a question?
Moving soon?
Bring both contracts of sale and your bank interest statements for the year.
Lomandra Accounting is a CPA Practice, registered with the Tax Practitioners Board and an SMSF Specialist. Emma, the Director, is a Certified Practicing Accountant (CPA) with extensive experience in commercial business management, and specialises in Self-Managed Super Funds (SMSFs).
- 07 5234 9201
- admin@lomandraa.com.au
- Sunshine Coast, QLD
- Monday to Friday, 9am to 4:30pm