CGT: consideration and cost base paper

Published on 12 Oct 07 by VICTORIAN DIVISION, THE TAX INSTITUTE

Calculation of consideration and cost base for CGT purposes can be made complicated by post completion and other events. The impact of different events is examined in this paper including:

• is the cost base fixed by the requirement to pay under the contract or can it change? For example, cost base adjustments for post-completion events
• how is cost base affected by set-off or forgiveness of liability to pay?
• CGT treatment of contingent and unascertainable amounts (eg earn-outs) for both consideration and cost base purposes
• is consideration under a contract ever fixed? What if there is known exposure to a warranty claim when the contract is signed?
• are legal costs related to opposing an indemnity claim part of the seller’s cost base?

Author profiles

Sue Williamson CTA-Life

Sue Williamson, CTA (Life), is a partner at EY specialising in tax controversy. Sue has worked in tax for more than 25 years, including roles in major law firms and executive roles within the firms in which she has been a partner. Sue was the President of The Tax Institute in 2008, has been a member of several advisory boards, has participated in many consultative forums and lectures in the University of Melbourne Masters of Law program. Sue was a member of the instructing solicitor team working on the Placer Dome litigation. - Current at 12 April 2019

More by Sue WILLIAMSON

• Cases update for corporate groups paper - 05-October-2016
• New tax avoidance and profit shifting laws - uncertainty for taxpayers - 31-July-2013
• Tax risk management paper - 30-May-2012
• ATO audits, disputes and litigation paper - 03-May-2012
• ATO endorsement: Tips and traps paper - 24-August-2011
• Duty anti-avoidance provisions - 01-August-2011
• Current Victorian duty issues and the growth areas infrastructure contribution paper - 12-April-2011
• The attribution of income from offshore entities - proposed simplificationof CFC and FAF. - 23-March-2011
• ATO confirms it wants part of your retail premium. - 18-February-2011
• The Commissioner's views on the taxation of gains made by non-resident private equity funds on the sale of shares in Australian entities. - 01-February-2011
• BHPB Finance Limited, the Commissioner of Taxation and a perverse view - 01-June-2010
• The new Tax Agents Services Regime - Setting up the procedures necessary to comply with your obligations paper - 09-October-2009
• Getting your practice and clients ready for the new tax agents services regime paper - 12-March-2009
• President's report: A year of achievements - 01-December-2008
• President's Report: Keeping our Members informed - 01-November-2008
• Tax litigation and audit strategies paper - 18-October-2008
• President's report: Recognition for revenue law practitioners - 01-October-2008
• Presidents report: A new era for tax reform - 01-September-2008
• The new tax agent regime paper - 28-August-2008
• President's report: Structured education makes its mark - 01-August-2008
• President's Report: Tax Agent Services Bill - 01-July-2008
• President's report: Federal Budget 2008-09 - 01-June-2008
• Cover story: Tax litigation and dispute developments - 01-June-2008
• Tax litigation - a new regime. - 01-May-2008
• President's report: Hitting the mark - 01-May-2008
• President's report: Support and opportunities for tax practitioners - 01-April-2008
• Tax litigation and dispute development: Where are we now and where are we heading paper? - 13-March-2008
• President's report: Focusing on our Members’ needs - 01-March-2008
• President's report: Setting the agenda for 2008 - 01-February-2008
• The new tax agent services regime - implications for taxpayers. - 01-November-2007
• Do You Have the Appropriate and Right Documents? - paper - 25-May-2007
• Business and entity sales: stamp duty issues paper - 28-November-2006
• CSR v Dick Smith Electronics paper - 24-May-2005
• Maintaining records of transactions - why, what and how? paper - 18-March-2005
• Interest: a critical analysis - 12-September-2002
• Corporate law simplification: dividends, imputation, share and capital amendments - 19-November-1998
• In practice: Sharing the pie - 01-August-1998
• Indirect taxes: Objections and appeals, interest and penalties - 01-August-1998
• Stamp Duty Implications of Corporate Reconstructions - 12-September-1997
• Stamp duty implications of corporate reconstruction - 11-September-1997
• It seemed a good idea at the time - are arrangements used in the past still effective - 30-April-1997
• Stamp duty: a new uniform: an overview of the stamp duty implications of corporate reconstructions - 14-November-1996
• Deceiving the Eye - Stamp duty| Stamp duty - an overview of provisions relating to the transfer of property - 23-November-1995
• Stamp duty on real property transfers - 01-November-1995
• Thin capitalisation : a critical review. - 01-June-1991

Click here to expand/collapse more articles by Sue WILLIAMSON.

Melanie Baker CTA

Melanie Baker, CTA, is a barrister who specialises in tax and administrative law. Before joining the Victorian Bar in 2010, Melanie was a Senior Associate in the Tax group of Allens Arthur Robinson. Melanie also worked at the ATO in Canberra for two years before joining Allens. As a barrister, Melanie regularly advises, and appears on behalf of, taxpayers and the Commissioner of Taxation DO NOT USE HER BIO ON VIC BAR WEBSITE - Current at 18 January 2019

More by Melanie BAKER

• Fraud or evasion? paper - 14-March-2018
• Taxation of non-resident investors on exit from Australia paper - 15-October-2014
• Recent cases paper - 26-March-2014
• Cases and rulings for SMEs - An update paper - 10-October-2013
• GST and Victorian state taxes update paper - 11-October-2012
• GST and property transactions paper - 22-September-2011
• Legislative changes - How do you implement them? The legal issues paper - 09-September-2010

Click here to expand/collapse more articles by Melanie BAKER.