Captial Gains Query & Date of Contract

Viewing 8 posts - 1 through 8 (of 8 total)

Boy in Blue
Participant
@boy-in-blue
Join Date: 2007
Post Count: 10
October 8, 2007 - 11:25 am
Hi All,
To get the 50% discount on captial gains, one must hold the asset for 12 months.
Now, I've been told two varying opinions from two different professionals.
One says the date of contract, not the settlement date is what counts. The other saying the opposite, that it's the settlement date.
Which is correct?
propertypower
Member
@propertypower
Join Date: 2006
Post Count: 312
October 8, 2007 - 1:29 pm
Hi Boy in Blue,
I believe the contract dates are used for calculating CGT.
Boy in Blue
Participant
@boy-in-blue
Join Date: 2007
Post Count: 10
October 8, 2007 - 1:41 pm
so in theory, if you were to get a 6 month settlement date, and then sell the property 6 months later (12 months total) you would get the 50% discount on CGT?
Terryw
Participant
@terryw
Join Date: 2001
Post Count: 16,213
October 8, 2007 - 1:59 pm
I agree it is the date of contract. So you could buy off the plan and resell on settlement 12 months later and still get the 50% CGT discount.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email Me
Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
elkam
Member
@elkam
Join Date: 2006
Post Count: 722
October 8, 2007 - 2:05 pm
Hello Boy in Blue
Here is a link to the ATO site which explains when the CGT event occurred.
As propertypower said it's calculated from contact exchange unless there isn't one, in which case the settlement date is used.
http://www.ato.gov.au/individuals/content.asp?doc=/content/36899.htm&pc=001/002/026/016/003&mnu=5060&mfp=001&st=&cy=1
There is also a CGT calculator there. Why don't use give your scenario a try and see what you get.
Hope this helps
Elka
bicky
Participant
@bicky
Join Date: 2007
Post Count: 12
October 28, 2007 - 11:13 am
the 12 month period starts from the date of contract, and i think it finishes on the date of contract for disposal, not settlement date.
if you buy , with a buy contract on 1-oct-07 and your buy settlement is on 1-dec-07,
and you sell with a sell contract dated 1-sep-08 and your sell settlement is dated on 1-dec-08,
then i don't think you would qualify for the 50% cg discount.
bicky
vicgirl
Member
@vicgirl
Join Date: 2004
Post Count: 69
December 1, 2007 - 12:23 pm
What if you have bought a block in November, then build a house on it and sell it a year later?
vicgirl
Terryw
Participant
@terryw
Join Date: 2001
Post Count: 16,213
December 4, 2007 - 4:12 am
Vicgirl – it is dated from the date of the contract for the land.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email Me
Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au