Paul: Good day guys, Paul Glossop here from Pure Property Investments. Again this is part of our educational series and again today I am joined by Peter Fawcett. Thanks for joining us Pete. Peter: No Problem. Paul: Peter Fawcett is a chartered accountant he’s also the principal of Agera Advisors. Today what we wanted to really cover is probably some elements around the fact that…and I see this quite often with my role as principal at Pure Property Investments, but I…and I personally have actually experienced this in my own investment portfolio, where clients buy property potentially with the assumption that at some stage it’s going to be an investment, or they want to live in a short term, move out of it and think that because they’ve lived in it and then turned it into investment property down the track that they’re going to get some exemption from any capital gains tax if they do choose to sell it. Now part of that may be true, but there is a lot of depends in this whole conversation here and I think from your in no doubt you’ve seen this more from then on I. And I think what I’d like is hopefully you can share with our viewers a little bit about how this actually impacts investors and what they should be considering when trying to move into this space of by investing probably maybe to turn it into and owner/oc or buying and owner/oc turning it into an investment property. Peter: We see this a lot and a lot of our customers recently have found that the ATO has become quite savvy in the data collection and actually have executed cases against our clients where they’ve thought, I’ve lived in my property. I don’t have to pay capital gains tax. Unfortunately the way the rules work and there’s a public misconception that, I live on my property I shouldn’t have to declare anything. But the ATO rules actually stipulate that you have to move in once first practical. So if you have a tenant in a property you purchase immediately. That’s not in the views of the ATO, that’s not the first practical point. The first practical point is the day of settlement, or if you complete renovations, it’s that day. So the ATO’s view is to believe that you have a capital gain problem even though you’ve lived in it. The time starts ticking for your property from day one. Not from the point you live it. And it’s an unfortunate scenario we’ve seen very recently where a number of cases have turned quite south for taxpayers and it’s just we’d like to educate people on the process. Because it is publicly misconceived. There are a number of other factors beyond these two simple points which we can obviously discuss at other points but, we’d just want to address there is a public misconception. Paul: Yeah massively and I think that that’s probably really, when it comes down to it, that’s the crux of it is that people think…and I heard people banding around there’s a six year rule and then there’s a whole bunch of other things but the reason why people have got misconceptions is because it’s not a black and white response. It’s actually it’s a depends answer I think that’s where the advice of a certified, qualified property focused accountant really is vital in what people are trying to achieve and knowing what you’re actually buying into. If you’ve got some, I guess perceptions that you’re going to buy property for certain reasons and get exemptions from tax because you’re living in it. It may not be the case, it may well be the case. But knowing your goals and knowing how that sits with what you’re buying and when you’re buying it and how you plan to move in and out of it, sell it, etc. All of these aspects have ramifications in your capital gains tax position. So I think it’s very sound advice and ultimately what it comes down to is get the advice early, understand it and make sure you apply it and don’t try to cheat the ATO because that would get you at every beck and call. And so they should to be honest, tax is a good thing. It pays for Esplanade that’s behind me. It pays for a lot of things. But really that’s the whole point is that it’s there for a reason, we make sure we adhere to it, and we make sure we understand the rules before we go into and purchase these properties. So guys I hope you found that quite educational and as always Peter’s details are at the bottom screen as are our’s. And we’ll no doubt see you soon. Thanks very much.