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?
This year
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
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?
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://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
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.
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