Keywords: property, subdivide, split, separate
Issue
How to split a combined property into two property accounts.
Background
The property was recorded as a combined property under one property account in Class previously. For example, the property is a duplex, the client would like to split it into two units and record them separately.
Resolution
To resolve this issue, a Property Sale and Property Purchase will need to be processed. The Depreciation Worksheet will then need to be used to pick up the original CGT date.
In order not to trigger a Capital Gain calculation, you need to change the existing property to a Non-CGT Asset.
Navigate to Fund Level > Investments > Browse Holding Account
- Click on the property
- Click on Edit
- Select Non CGT Asset to Capital Gain Classification
- Click on Save
Navigate to the Fund Level
- Dispose of the combined property with the book cost via Transactions > Investment - Sell > Property Sale Deposit with $0 deposit and Investment - Sell > Property Sale Settlement with the book cost as the remaining amount.
- Create two property accounts for property #1 and #2 via Investments > Property - refer to our Property Set-Up article for guidance on creating property accounts
- Process a property acquisition for property #1 and #2 via Transactions > Investment - Buy > Property Purchase Deposit with nil amount for the Deposit amount and the book cost in the Remaining Amount fields
- Process a business event as Investment - Buy > Property Purchase Settlement > enter the Date and the Remaining Amount exactly the same as per the Deposit event
- Use the Depreciation Worksheet to pick-up the original CGT date. Refer to our Depreciation Worksheet article for further guidance
- Update the market value for property #1 and #2 via Investments > Browse Holding Accounts > Menu icon
> Holding Price/Valuation. Refer to Property Valuations for further guidance
The Remaining Amount in the Deposit event must be equal to the Remaining Amount in the Settlement event as shown below.
