This month we have prepared two articles that cover current issues we believe are relevant to SME advisors.
The first article looks at why settlement date (rather than contract date) can sometimes be the more important date when determining the CGT implications of a transaction.
The second article looks at how the intent prior to acquisition of an asset can have a significant impact on the tax outcomes arising on the eventual disposal of the asset.
CGT: Contract date or settlement date?
It is generally assumed that for tax purposes a capital gain (or loss) arises in the year the sale contract is entered into. While this will often be the case, recent Court decisions have highlighted the fact that transfer/settlement date can sometimes be the more crucial date for CGT purposes.
‘Capital gain’ deemed to be a revenue gain – why intent is important
Many people would assume that a gain made on the sale of a rental property held for nearly 10 years would be a capital gain eligible for the 50% general discount. However, in a recent decision by the Full Federal Court, the length of time a rental property had been owned was deemed less significant than other factors in deciding the tax outcomes.