Instalment sale and CGT date
The buyer pays us over 3 years. When is CGT due?
The situation
CGT is tied to the disposal date, which is generally when the agreement completes, not when each payment is received.
The law
- Secs 65E and 65F and Part XXI of Schedule 1, Income Tax Act 1967: Capital gains tax on disposal of unlisted shares: 10% of gain, or 2% of gross price for shares bought before 1 Jan 2024
What it means for you
You may need to pay CGT before receiving all the money. Plan cash flow. Check if the agreement has conditions that change the disposal date. Price adjustments after completion may need a revised computation. Keep the agreement and payment schedule in the file.
What to do
- Find the disposal date in the agreement.
- Compute CGT on full price.
- Plan cash.
- File within 60 days.
We can do this for youCapital gains tax on disposal of unlisted shares: MYR 2,000