CGT date for partition

Discussion in 'Accounting & Tax' started by Lillian, 7th Feb, 2020.

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  1. Lillian

    Lillian New Member

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    Hi everyone, I have a question regarding the exact date of CGT event for partition of a land into two lots.

    For example,

    1 Jan 2020 - signing deed of partition.
    1 Feb 2020 - subdivision finish and two new title registered.
    1 March 2020 - submit deed of partition to OSR.
    1 April 2020 - OSR finish assessment and partition done.

    So in the above scenario, which date is the CGT event date?
     
  2. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Plus Member

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    It will depend on the wording of the deed.

    Generally a deed of partition will be worded so that beneficial ownership changes and this would be the trigger event.
     
  3. Lillian

    Lillian New Member

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    The word is as follows. Does it mean the CGT is triggered at completion date?


    6 Completion and payments
    (a) The parties will execute all assurances and perform all acts necessary to give effect to the partition and to vest the various allotments in the parties entitled to them, including without limitation the execution and registration of transfers to effect the partition.
    (b) Any money payable by a party to another party will be paid immediately upon registration of the transfers required to give effect to the partition (Completion).
     
  4. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Plus Member

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    This is some serious stuff - best to get some paid legal advice.
     
  5. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Plus Member

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    and those are not the relevant clauses
     
  6. Paul@PFI

    [email protected] Tax Accounting + SMSF Business Plus Member

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    Does CGT apply or is this a revenue issue ? Have you obtained tax advice? This would also address the timing for the relevant CGT event/s.

    Also be aware that is the partition is undertaken as a part of a enterprise then GST may also apply at that same time.
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