Income Tax Assessment Act 1997
View history note
Hide history noteCGT event H1 happens if a deposit paid to you is forfeited because a prospective sale or other transaction does not proceed.
The payment can include giving property: see section 103-5 .
Example:
You decide to sell land. Before entering into a contract of sale, the prospective purchaser pays you a 2 month holding deposit of $1,000.
The negotiations fail and the deposit is forfeited.
104-150(1A)
The amount of the deposit is reduced by any part of the deposit that is:
(a) repaid by you; or
(b) compensation you paid that can reasonably be regarded as a repayment of all or part of the deposit.
The payment can include giving property: see section 103-5 .
104-150(1B)
However, the deposit is not reduced by any part of the payment that you can deduct.
104-150(2)
The time of the event is when the deposit is forfeited.
104-150(3)
You make a capital gain if the deposit is more than the expenditure you incur in connection with the prospective sale or other transaction. You make a capital loss if the deposit is less .
104-150(4)
The expenditure can include giving property: see section 103-5 . However, it does not include an amount you have received as *recoupment of it and that is not included in your assessable income.
Example:
To continue the example: if you gave a lawyer wine worth $400 in connection with the prospective sale, you make a capital gain of:
$1,000 − $400 = $600
Disclaimer and notice of copyright applicable to materials provided by CCH Australia Limited
CCH Australia Limited ("CCH") believes that all information which it has provided in this site is accurate and reliable, but gives no warranty of accuracy or reliability of such information to the reader or any third party. The information provided by CCH is not legal or professional advice. To the extent permitted by law, no responsibility for damages or loss arising in any way out of or in connection with or incidental to any errors or omissions in any information provided is accepted by CCH or by persons involved in the preparation and provision of the information, whether arising from negligence or otherwise, from the use of or results obtained from information supplied by CCH.
The information provided by CCH includes history notes and other value-added features which are subject to CCH copyright. No CCH material may be copied, reproduced, republished, uploaded, posted, transmitted, or distributed in any way, except that you may download one copy for your personal use only, provided you keep intact all copyright and other proprietary notices. In particular, the reproduction of any part of the information for sale or incorporation in any product intended for sale is prohibited without CCH's prior consent.
