Commentary

C2.1006 Forfeiture of deposit

Capital gains tax
Capital gains tax | Commentary

C2.1006 Forfeiture of deposit

Capital gains tax | Commentary

C2.1006 Forfeiture of deposit

The forfeiture of a deposit paid in contemplation of a purchase, whether of land or of goods (eg under a contract to purchase a painting), or in respect of any other transaction (eg the hire of a yacht), is treated as if it were the abandonment (by the person paying the deposit) of an option binding the grantor to sell1.

Thus, the abandonment of the transaction by the person paying the deposit is not treated as a disposal by him2. Accordingly, the person losing his deposit cannot claim any loss relief.

On the other hand, there is a

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