Development/Trading Stock/Sale Dates

Hi Guys,

Just looking for confirmation or otherwise of consequences of selling off the plan - contract signed date or settlement date . . .

If I have bought land for the purpose of subdividing, constructing 3 townhouses with intention to sell and make a profit.

Registered for GST and using a company structure (existing discretionary trust as shareholder).

So it is taxed on revenue/income account (not CGT) and is classed as trading stock until disposed of.

Land purchased 1/9/2014 construction extends through a financial year.

Lets say I sell all 3 off the plan 30/5/2015 but settlement doesn't occur until 30/11/2015.

Are there any tax consequences in the 2015 financial year with regards to the sale? ie I'm trying to figure out if the contract signed date or settlement date is the date the trading stock is disposed of.

Many thanks.
 
Generally Income is not recognised until settlement date for developments

Fixed that.

It may depend on when titles are issued. Prior to titles being issued there isn't anything to actually sell - hence the recognition of income is on the issuance of titles or settlement.

In some instances there may be a physical asset prior to titles (land) and the recognition of income.

Or GENERALLY it is on settlement.

Blacky
 
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