Mr Chan saw a shop in Ashfield advertised in the ” Domain ” section of T he Sydney Morning Herald for $ 4 50,000. He decided to acquire the shop with the intention of leasing it out to interested entrepreneurs. T

Mr Chan saw a shop in Ashfield advertised in the ” Domain ” section of T he Sydney Morning Herald for $ 4 50,000. He decided to acquire the shop with the intention of leasing it out to interested entrepreneurs. The signed contracts were exchanged f or the shop on 29 September 200 5 and the purchase price was paid on 6 January 2006 .

Discuss the capital gains tax implications of the following:

(a) the shop was sold on 30 June 20 1 8 for $ 1,115 ,000

(b) the shop was sold on 30 June 20 1 8 for $18 0,000

(c) extensive extension works were made to the shop at a cost of $ 8 5 ,000 between 31 March 20 1 1 and 20 June 20 1 1 as per a contract dated 31 March 2010 . The extension works were paid for on 20 June 20 1 1 . Further capital improvem ents were made in September 20 12 at a cost of $ 14 0,000 . The shop was sold on 30 June 20 18 for $1,500,000.

(d) a side annex to the shop was sold on 30 June 20 1 8 for $ 1 8 0,000. The market value for the remainder of the shop at that date was $ 95 0,000 .

 

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