Preventing timing issues on deferred settlements

 

A payment of capital gains tax on a deferred settlement may not be required until an amended assessment is issued by the ATO. This amendment can be initiated by the taxpayer without interest or penalty, which means that clients may defer their liability until after receiving capital proceeds.

Many situations exist where a property owner may sell a capital asset with a settlement period twelve months or longer. This recent Private Binding Ruling explores the Commissioner's interpretation of the capital gains tax provisions in the tax law and its procedural applications.

Source: PBR 1051223308097