BEWARE when you are about to sign ANY contract of sale

BEWARE when you are about to sign ANY contract of sale

i.e. property, a business, a lease, shares!

Phillipa decided she had enough of her investment property and put it up for sale. She wanted the profits upon the sale to do other things in her life.

She signed the contract on June 1, 2024, thinking her settlement funds would be paid to her on September 1, 2024, and she would worry about the tax in the next tax year.

Upon the preparation of her 2024 tax return due by May 15 she was informed that she would have to pay $45,000 capital gains tax.

She almost fell off her chair when told the sum of her tax for the 2024 tax year! Because she signed the SALE contract on June 1st, 2024, she herself caused the capital gains tax and gave herself VERY little time to tax plan and put in place other tax deductions to reduce this $45,000 tax bill.

Phillipa incorrectly assumed that the settlement date was the actual date of sale thinking the tax would fall due in the next tax year. Phillipa only gave herself 30 days to June 30 after the contract was signed to put in place tax deductions.

A better outcome would have been to sign the contract on July 1st which would have given her 12 months to tax plan and put in place tax deductions to reduce this $45,000 tax bill.

Are you wondering what deductions could you use to find this level of tax deductions? Contact us to find out 1300 655 096.