Announcements
Worried you’re missing part of your refund? Remember, the low and middle income tax offset isn’t a refund on its own – it’s used to offset (or reduce) the amount of tax you pay. The offset amount you may be entitled to is automatically applied and could range between $255-$1080, depending on things like your taxable income and how much tax you’ve paid.
Still not sure? Ask the Community

ATO Community

Re: CGT - timing of paying CGT when settlement happens long after contact sign date

Newbie

Views 1802

Replies 2

Hi, I purchased an investment property back in 2014. Now the owners of the building have all joint a collective sale to a developer. the settlement will happen 2 years after sign of sale contract. it is likely that the sale of contract will happen in June 2018. my 2 questions are:

 

1. for CGT, will it be assessed in FY18 financial year or it will be assessed after settlement in 2 years time?

2. Timing of paying the CGT, if CGT is assessed in FY18, do i need to pay the CGT in the next 12 months? or i can apply for an externsion and pay CGT until i get the payment from settlement?

 

thanks

1 ACCEPTED SOLUTION

Accepted Solutions

Most helpful response

ATO Certified Response

Former Community Support

Replies 0

Hi @Diao,

 

Welcome to our Community,

 

We can provide you with genera information relating to CGT as there are a lot of factors which need to be taken into consideration.

 

Generally, in the case of real estate, a CGT event occurs when you enter into a contract (e.g. the date on the contract) and not the date of settlement. 

 

A capital gain needs to be reported in your tax return of the financial year when the CGT event occurred and is added to your assessable income. You can find information to help calculate your capital gain or loss here.

 

If your tax return results in you owing tax due to a capital gain and you need help with paying, you can contact us to discuss a possible payment arrangement.

 

You can find more information about CGT on our website, or alternatively if you have further questions you can phone us on 13 28 61 between 8am - 6pm, Monday to Friday to speak with an operator.

 

Thanks, JodieH.

2 REPLIES 2

Taxicorn

Replies 0

Ownership period is Bought Settlement Date to Sold Settlement Date.

 

The CGT event happens inthe financial year the the contract was signed to sell it.

So if the contract is signed in June 2018 then the CGT will happen in the 2018 Tax Year.

 

The ATO will allow you to lodge your return without the CGT Event declared, provided  you lodge an amendment once settlement takes place.

TD 94/89

 

Most helpful response

ATO Certified Response

Former Community Support

Replies 0

Hi @Diao,

 

Welcome to our Community,

 

We can provide you with genera information relating to CGT as there are a lot of factors which need to be taken into consideration.

 

Generally, in the case of real estate, a CGT event occurs when you enter into a contract (e.g. the date on the contract) and not the date of settlement. 

 

A capital gain needs to be reported in your tax return of the financial year when the CGT event occurred and is added to your assessable income. You can find information to help calculate your capital gain or loss here.

 

If your tax return results in you owing tax due to a capital gain and you need help with paying, you can contact us to discuss a possible payment arrangement.

 

You can find more information about CGT on our website, or alternatively if you have further questions you can phone us on 13 28 61 between 8am - 6pm, Monday to Friday to speak with an operator.

 

Thanks, JodieH.