It seems some people out there advise people to sign contracts with XX ‘and/or nominee’ so they can substitute a different person or entity to settle on the property. i.e. the contracting entity is different to the end ownership entity. This seems to be pretty popular in Victoria – possibly because of the stamp duty laws there. A contract can still be in one name with the settlement in another name even without the and/or nominee. This is a dangerous strategy for a number of reasons, one of which is CGT. What happens when this is done is that it triggers a CGT event C2, section 104-25 ITAA97. It could also be CGT event E2. A contract is a ‘bundle or rights’ – assigning those rights is the CGT as would be disposing of those rights. Example Homer acquires a development site in Victoria and negotiates a loan settlement. He starts the process of apply for subdivision approval and then nominates a company as trustee of a discretionary trust at settlement. The trustee becomes the owner of the property. Homer is up for a $100,000 capital gains tax event because the property was purchased for $500,000, but with the passage of time and the DA for subdivision it was worth $600,000 at settlement. Poor old Homer has to pay $25,000 in tax even though he received no money or benefit from the nomination. You might think if you have a 30 day settlement this would not matter. But it is still a CGT and you will still need to record it in your tax return incurring extra tax agent fees – and possibly run the risk of the ATO arguing there was a jump in price. For this and other reasons the contracting party should be the party that settles the property.