Just wondering if anyone has previously looked into this. As part of the contract for sale of a property, it states that if the completion/settlement is delayed by either party (ie. buyer or seller), then the defaulting party shall pay to the other party on completion/settlement, 10% interest per annum calculated daily on the balance of the purchase price.
Would this interest be deductible for the party who pays the interest to the other party?
Or would it be considered reduced 'consideration' for the sale of the property (ie. capital/CGT)?
Or potentially, is the interest paid a separate CGT event leading to a capital loss for the party who pays the interest?
Any assistance would be greatly appreciated. Thanks