For dual property development or land partition, does CGT event occur on the date of signing Contract of transfer (because of partition) or on the date the partition actually takes place?
If the co-owners enter into a deed whereby they acknowledge that the land is to be held on bare trust for the benefit of each other in accordance with the proposed plan of subdivision each co-owner will hold their interest in the other co-owners post-partition lot on bare trust for that other co-owner. This may lead to a different result
I think I get it now. You are holding land and then partitioning mid stream. Transfer of land is not a contract so the CGT would likely be on the date of the transfer. If entering a deed of partition this may be different. You need some legal advice, and possibly a private ruling. If developing it won't be on capital account usually.
Apologies didn't make it clear. 2 brothers are building two houses to use as their main residences on one land. Jointly owned. The cgt event is to transfer 50% to each other. So wondering when does CGT event occurr for the transfer?
No deed creared. Construction commenced and decided to go through partition. There are two contracts of transfer 50% from joint owners to one owner. The contract prices are based professional valuations.
Did you get advice? CGT event A1 probably so date of contracts is the likely trigger point. Tax Tip 214: At what date is CGT Triggered? Part 1 Tax Tip 214: At what date is CGT Triggered? Part 1 Probably no main residence exemption available Received advice on the stamp duty and GST aspects? Also deductibility of interest, now or in the future needs to be carefully considered
Gst on a partition occusrs with a supply. Cash or accrual? CGT events IF applicable can also be different.