This information is for use by clients who buy and sell property. Clients must maintain and keep certain records for each purchase or sale of land and buildings under the taxation laws.
DOCUMENTATION & INFORMATION
During each property transaction, Behan Legal provides a file wallet for all correspondence and documents that clients need to deal with in their transaction and for accounting needs necessary to comply with the provisions of the income tax legislation relating to record keeping and capital gains tax.
These documents and records may include:
a) Contract of Sale, which identifies the property purchased, purchase price and date of acquisition. The date of acquisition is the date you entered the contract. If there is no Contract, the date of acquisition is when the change in the ownership takes place
b) Certificate of Title
c) Costs incurred, stamp duty, registration costs and other acquisition expenses associated with the purchase of the property. Certain incidental costs which can be added to the cost base listed in the taxation laws include:
i) Fees, commission, or remuneration for the professional services of surveyors, valuers, auctioneers, accountants, brokers, agents, consultants, or legal advisors
ii) Costs of transfer, including stamp duty or other duty
iii) Advertising costs
iv) Costs for valuations or appointment under, or Capital Gains Tax for the acquisition
d) The cost base cannot include expenditure that is deductible for income tax purposes such as borrowing costs, interest costs, and repairs. Professional tax advice costs are not included in the cost base.
e) Details and records of any capital improvements made to the property
CAPITAL GAINS TAX RECORDING SCHEDULE
Clients should enter and stored these details in the Capital Gains Tax Recording Schedule and keep it until the Australian Taxation Office no longer requires it.
NOTES FOR CALCULATIONS
If (9) exceeds (8) there is a taxable profit on this difference
If (7) exceeds (9) there is a capital gains loss
If (9) is greater than (7) but less than (8) there are no tax consequences.
Deemed Cost (2)
CPI @ Acquisition (3)
CPI @ Disposal (4)
Column (4) -Column (3)
Column (5) x Column (2)
Initial Acquisition Costs
Specify Ensuing Costs
Total Actual Cost (7)
Total Indexed Cost base (8)
Total Sales Revenue (9)
NEED MORE INFORMATION
Behan Legal assists and advises on these important issues. For an appointment, call 03 9646 0344