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WilliamHu(Champion)Champion
7 July 2021

Hi,

A company sells its office premise (capital asset). The contract is signed on 25/06/2021 but the amount (inclusing the deposit) was paid to the company's account on 06/04/2021. The company is using cash basis for accounting and bas reporting. Can you please advise should the revenue of the disposal be recognised in 21FY (time of singing the contract, CGT event A1) or 22FY (time of money received, cash basis).

If the contract of selling the premise is signed in 22FY, but the deposit is received in 21FY, and the company is using cash basis for bas reporting and accounting, can you please advise if the deposit should be recognised in 21FY (time of money received, cash basis) or 22FY (time of singing the contract, CGT event A1). Thanks!

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773 views
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BlakeATO(Community Support)Community Support
7 July 2021

Hi @WilliamHu

Capital gains tax works a little differently than normal income tax. The time of the capital event is the time at which you sign the contract for sale, whether or not you're on an cash basis. This means the capital gains event happens on 25/06/2021.

You can read about the time of the CGT event on our website.

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