Payment plan for CGT & use profit for new purchase?

Discussion in 'Accounting & Tax' started by chunho01, 29th Feb, 2020.

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  1. chunho01

    chunho01 Well-Known Member

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    I am selling my investment and buying a PPOR within the few months. I will incur a hefty capital gain tax. While it means the property did okay, tax is just lost money.

    Is it possible to set up some sort of a monthly payment plan for the tax, and instead add the fund towards my PPOR purchase now?

    There's a calculator on ATO site, so I thought this is possible?
     
  2. Mike A

    Mike A Accountant Business Member

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    you can ask the ATO for a payment plan. GIC is around 7.91% so its a fairly expensive form of funding.
     
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  3. Trainee

    Trainee Well-Known Member

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    Depending on when you sign the sale contract you might not have to pay tax until almost 2 years down the track?
     
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  4. Mike A

    Mike A Accountant Business Member

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    Agree. Would be better to have the estimated tax sitting in an offset account until the tax is due reducing the non deductible home loan.
     
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  5. chunho01

    chunho01 Well-Known Member

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    Please elaborate? Purchased Oct 2014. Sale should happen via auction about April 2020
     
  6. Trainee

    Trainee Well-Known Member

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    Check with your accountant.

    if a share is sold in july2020, then this would be for the tax year ending jun 21, and that return wouldnt be due until early 2022 if a tax agent is used.
     
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  7. Mike A

    Mike A Accountant Business Member

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    Cgt event april 2020. Ye june 2020.

    If lodged through an agent have until may 2021 to lodge and pay
     
  8. Terry_w

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

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    Could you run the auction 1 July? Get to hold onto the money for another 9 months then, approx
     
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  9. Marg4000

    Marg4000 Well-Known Member

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    Hold your auction early July 2020. CGT date is the date of contract

    Declare gain on income tax return 2020\2021. Have your tax form prepared after 30th June 2021 but don’t have it lodged with the ATO.

    Get your accountant to lodge your return as late as possible - around May 2022.

    Payment due within a month or so, but you have delayed payment for nearly 2 years. Put the estimated tax in an offset account attached to your PPOR and don’t spend it!
     
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  10. chunho01

    chunho01 Well-Known Member

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    I thought the deadline is 31 Oct, so a FY20/21 would due 31 Oct 2021.

    Presuming tax agents have a much longer deadline?
     
  11. Mike A

    Mike A Accountant Business Member

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    they certainly do...15 May
     
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  12. Paul@PFI

    [email protected] Tax Accounting + SMSF Business Plus Member

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    And many people think the tax on their gain is much higher than it actually is. Or in some cases vastly underestimate the effect of past depreciation and capital allowances on the costbase. There also could be other impacts too like private health offset, medicare levy sucharge, help debts etc. Its often worth the tax advice to determine what ALL the impacts may be so that the tax is estimated.