Delaying payment until a date after property settlement

Discussion in 'Accounting & Tax' started by shelleykins, 1st May, 2020.

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  1. shelleykins

    shelleykins Well-Known Member

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    I was wanting to sell a property prior to EOFY2019/2020 but purchasers requiring delayed settlement due to not having entire amount of funds available by standard 6 week settlement. Am i able to settle in this financial year to reduce capital gains tax, with a clause for residual payment due by end of July?
    Thanks
     
  2. Terry_w

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

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    You should get some tax advice as it is likely to be the contract date that counts.
     
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  3. shelleykins

    shelleykins Well-Known Member

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    Thanks Terry. Is the contract date the date that the contracts exchange?
     
  4. Terry_w

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

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    generally yes, but not always
     
  5. shelleykins

    shelleykins Well-Known Member

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    Thanks Terry. Will seek further tax advice but generally, cgt would be payable for the fy in which the last party signed the contract of sale, regardless of when the money hits the account or the sale settles?
     
  6. Terry_w

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

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  7. Paul@PFI

    [email protected] Tax Accounting + SMSF Business Plus Member

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    If there is a contract. That is usually the relevant date for cgt