Taxation Law - Sale of Investment Property | Presentation

Taxation Law

Sale of Investment Property
• Harrison bought an investment property in 2001 for a sum of $800,000 and
was recorded as proprietor.
• Harrison eventually sold the property for $1.3 million in the year 2018. When
Harrison sold the investment property a “CGT event A1” within “section
104-10 (1)” happened.
• Citing“FCT v Sara Lee Household (2002)” the “CGT event A1” occurred
when Harrison entered into the contract of disposing the investment property.
• Under “section 116-20 ITAA 1997” the sum of $1.3 million received by
Harrison upon disposing the investment property represents the capital
proceeds as the market value of the asset in respect of the CGT event.

Sale of Shares
• The shares should be classified as post-CGT asset and
hence the regimes of capital gains tax are applicable.
• Referring to “FCT v Sara Lee Household (2002)” the
contract for sale of shares was signed by Harrison to
transfer the document on 20th June 2018, the capital gains
are derived by him in the income year of 2017-2018.
• The liability of reporting the capital gains falls in the year
2017-2018 and under “section 108-5 ITAA 1997” it will be
included in his assessable income for tax purpose

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