When does a sale occur and a debt is created?
4. Income from the sale of goods by lay-by which is assessable on an accruals basis is derived by a seller for the purposes of subsection 25(1) of the ITAA when a sale takes place and a debt is created. We consider that this is when the buyer pays the final instalment of the purchase price and the goods are delivered to the buyer. When are amounts received under a lay-by sale earned? 5. Amounts received by the seller from the buyer while goods are held by the seller under a lay-by sale are not earned by the seller, and therefore are not derived for the purposes of subsection 25(1) of the ITAA, until the buyer pays the final instalment of the purchase price and the goods are delivered to the buyer. Whether goods held by a seller under a lay-by sale are trading stock on hand 6.
4. With one exception, income from the sale of goods by lay-by which is assessable on an accruals basis is derived by a seller for the purposes of subsection 25(1) of the ITAA when a sale takes place and a debt is created. We consider that this is when the buyer pays the final instalment of the purchase price and the goods are delivered to the buyer. 5. The exception is any initial deposit which, by the terms or conditions of the lay-by sale, is a non-refundable deposit that a buyer is required to pay to a seller. Ordinarily, it is required to be paid on or shortly after it becomes due, i.e., before the goods are delivered. A non-refundable deposit is derived by, and is assessable to, a seller when it is due to be paid by the buyer. When are amounts received under a lay-by sale earned? 6. With one exception, amounts received (e.g.
4. Income from the sale of goods by lay-by which is assessable on an accruals basis is derived by a seller for the purposes of subsection 25(1) of the ITAA when a sale takes place and a debt is created. We consider that this is when the buyer pays the final instalment of the purchase price and the goods are delivered to the buyer. When are amounts received under a lay-by sale earned? 5. Amounts received by the seller from the buyer while goods are held by the seller under a lay-by sale are not earned by the seller, and therefore are not derived for the purposes of subsection 25(1) of the ITAA, until the buyer pays the final instalment of the purchase price and the goods are delivered to the buyer. Whether goods held by a seller under a lay-by sale are trading stock on hand 6. Goods in the possession of a seller at the end of a year of income which are subject to a lay-by sale agreement are ‘trading stock on hand’ of the seller for the purposes of section 28 of the ITAA at the end of th
