CGT situation

[pseudo]

Hi,

I am getting conflicting reports so hopefully someone can help my situation.
I sold a property in Jan 2014 prior to end of financial year. My understanding was i could lodge a CGT deferment until may 2015, if engaged a registered tax agent, which i have.

My tax agent is telling me i will be up for interest payment as i engaged them in November/December. The reason they state, I engaged them after October 30 deadline.

I have never paid my taxes late nor have i received notice of assessment for the CGT yet?

Am i wrong in my understanding? is the tax agent right?
Will i be up for interest on the amount of tax due?

Regards,
Pseudo.

 

[MRO]

It is not a 'CGT deferment'. What you are referring to is a later lodgement and payment date you get by using a registered tax agent to lodge your return.

I havent worked in tax for some time but I agree with your tax agent. If you had seen him prior to your lodgement date it would have been different.

Just lodge the return and make a payment arrangement.

It is a very unfair system where some tax payers are given far better payment terms for there tax debt than others, due solely to the fact they use a tax agent. On a large tax debt this can add up to $1000's of dollars. I prepare my own return but may choose to use a tax agent next year solely for the purpose of the extended interest free tax payment deadline. Stupid and unfair system!

 

[coastymike]

you lodged your own returns. lodgement deadline 31 oct.

you engaged a tax agent after 31 oct. deadline for you not extended to may 31.

penalties and interest to apply.

 

[Paul@PFI]

Correct. Tax agents offer deferred lodgement and payment dates provided several matters are satisfied:
- No prior year arrears of lodgements (If PY return is lodged after 30 June then NO deferral occurs even with a tax agent)
- Not a "problem taxpayer" who is denied late lodgement
- PY return was agent lodged OR
- Current year agent registration prior to 31 Oct.

Even then that doesn't automatically entitle every taxpayer to the final due date. For example a large CGT tax debt may mean the due lodgement and payment date is earlier than May. It depends on the taxpayer classification based on the ATO.

You may ask the agent why they didn't explain this however I often get people who register telling me they will complete their affairs asap then they drag the chain. Tax agent lodgement doesn't ultimately change the date the final tax is due and payable (with some exceptions I wont go into).

Normally if a client tells me they have a expected large tax debt due to CGT I always ask for details and ensure they know the exact $ impact. They way they set the $ aside. Strategy discussion to defer payment and lodgement follows.

A nice letter to the ATO explaining that you were mistaken in your understanding may assist - Ask for a remission of any interest and see how you go.

If you are charged interest bear this in mind.
1. The rate is lower than a card or personal loan rate; and
2. The GIC is tax deductible. Loans interest to pay a tax debt is NOT.