One more question for the experts…
If you contract to sell a house on the 1st of March 2006 and it settles on the 1st of July 2006 …
– does that mean that your profit / income made goes into the 2006/07 tax year and return.?
I only ask this as i realise that the date of the O & A is used for CGT purposes but I am assumaing that the income recieved goes into whatever year the property settles.
thanks in advance
Michelle
TradeOff,
This is totally incorrect. As per my previous post the income is deemed to have been received for CGT purposes when the contracts have been exchanged NOT when settled. When the income is received is irrelevant.
Read Section 104.10 of the Income tax Assessment Act 1997. The example provided in the legislation makes it abundantly clear when income is recognised for CGT purposes. Income will be DEEMED to have been received in the 2005/06 year despite the fact the income was ACTUALLY received in the 2006/07 year.
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