All Topics / Help Needed! / When is a Capital Gain assessed by the ATO?

Viewing 5 posts - 1 through 5 (of 5 total)
  • Profile photo of reecereece
    Participant
    @johnreece
    Join Date: 2015
    Post Count: 7

    Hi guys, A simple question…
    I have just sold an investment property that I have had for 5 years.
    The contract is dated 15/05/2016, with it going unconditional on the 29/05/2016 and a settlement date on 2/07/2016.

    For tax purposes, is the capital gain assessed at the contract date or the settlement date?
    The contract date means that I have to pay tax on the property this financial year but the settlement date means that I get an extra 12 months use of the money.

    Which is the correct date?

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213

    This year

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://structuring.com.au/
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Aust wide) http://propertytaxbook.com.au/

    Profile photo of DeanCollinsDeanCollins
    Participant
    @deancollins
    Join Date: 2015
    Post Count: 376

    I’ve asked before but is there something that you can do to move a contract date…..eg if you write “an option to purchase on XYZ date” is this enough to move the date?

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213

    I’ve never looked into this, but a colleague did a conveyancing matter where the vendor used a put and call option to delay entering the contract (but lock it all in) and when asked why they stated for CGT reasons.

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://structuring.com.au/
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Aust wide) http://propertytaxbook.com.au/

    Profile photo of DeanCollinsDeanCollins
    Participant
    @deancollins
    Join Date: 2015
    Post Count: 376

    To be honest I’m surprised it doesn’t happen more often…..

    I’m assuming would need to be an option to “not go through with purchase ” right in order to pass ATO requirements of true risk (but what the heck do I know) but I’m sure a vendor would be happy with a 10% down “option to purchase with no refund if sale didn’t actually happen after the 1st of July”.

    Would such a contract need to even be provided to ATO etc eg could just be shredded after regular sales contract actually gets signed on the 1st of July.

Viewing 5 posts - 1 through 5 (of 5 total)

You must be logged in to reply to this topic. If you don't have an account, you can register here.