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Edited version of your written advice
Authorisation Number: 1051398833934
Date of advice: 25 July 2018
Ruling
Subject: Capital gains tax (CGT) and a forfeited deposit
Question
Has the deposit been forfeited as part of a continuum of events such that the forfeited deposit forms part of the capital proceeds from the disposal of the Property in the 20XX financial year?
Answer
Yes.
Having considered the facts and circumstances of this case, the Commissioner considers that continuous and reasonable attempts were made and that the forfeited deposit will form part of the capital proceeds from the sale of the Property in the 20XX financial year. More information on types of CGT events can be found on our website ato.gov.au and entering Quick Code QC22154 into the search bar at the top right of the page.
This ruling applies for the following period:
30 June 20XX
The scheme commences on:
1 July 20XX
Relevant facts and circumstances
A contract for the sale of the Property was signed with a purchaser. Under the contract, the purchaser was required to make an initial deposit upon entering into the contract and a further deposit at a time after the date of the contract. The purchaser complied with these terms at the relevant dates.
The contract was due to settle, however was terminated and the purchaser forfeited the total deposit.
The Property continued to be available for sale for the period from termination of the contract until a subsequent contract for sale was signed and settled. Real Estate Agents continued to be engaged to sell the Property and the price was reduced over that period.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 104-150.