| To understand Capital Gains Tax, you must first | | | | made on an asset that was acquired prior to the |
| understand what capital gains means. Put simply, | | | | Capital Gains Tax legislation. That is if it is before 20 |
| Capital Gains are the difference between the buy and | | | | September 1985 (pre-Capital Gains Tax). |
| sell price of an asset i.e. profit. Capital gains tax (CGT) | | | | There are other exemptions from Capital Gains Tax, |
| is the tax you pay on any capital gain (profit on an | | | | but the other popular exemption applies if the asset |
| asset) you make and include on your annual income | | | | being sold is deemed to be a person’s principal |
| tax return. There is no separate tax on capital gains; it | | | | place of residence. As a rule, there is no Capital Gains |
| is merely a part of your income tax. You are taxed on | | | | Tax applicable on the sale of someone’s home, as |
| your net capital gain at your tax rate. | | | | long as the property is deemed to be the person’s |
| Your net capital gain is:your total capital gains for the | | | | principal place of residence, i.e. it is where they live, and |
| yearminusyour total capital losses (including any net | | | | is less that 2 hectares in size. |
| capital losses from previous years)minusany CGT | | | | Do you need to pay Capital Gains Tax? |
| discount and CGT small business concessions to | | | | To work out whether you have to pay tax on your |
| which you are entitled. | | | | capital gains, you need to know: |
| There are many events that could take pace that will | | | | • whether a Capital Gains Tax event has |
| have a CGT effect, these are known as ‘Capital | | | | happened |
| Gains Tax Events’. The most common Capital | | | | • the time of the Capital Gains Tax event |
| Gains Tax (CGT) event takes place when you | | | | • how to calculate the capital gain/loss |
| dispose of an asset to another person – for | | | | • whether there is any exemption or rollover |
| example, if you sell the item or give it away (including | | | | that allows you to reduce or disregard thecapital gain |
| to a relative) the disposal could mean that you are | | | | loss |
| liable to pay Capital Gains Tax. As a rule of thumb, | | | | • how to apply any capital losses |
| whenever you are changing ownership of an asset it | | | | • whether the Capital Gains Tax discount |
| is more than likely that the transaction will have some | | | | applies, and |
| Capital Gains Tax consequences. | | | | • whether you are entitled to any of the |
| Also, it is important to know that if an Australian | | | | Capital Gains Tax concessions for small business. |
| resident makes a capital gain or capital loss anywhere | | | | The team of accountants and business advisors at |
| in the world (and deemed to be a possible Capital | | | | The Quinn Group can assist you with a wide range of |
| Gains Tax event) for any of their assets, domestic or | | | | services to help you find out whether you need to pay |
| international, then Capital Gains Tax calculations will | | | | Capital Gains Tax. For individually tailored information |
| also need to be added to your income tax return. | | | | and advice for your Capital Gains Tax situation |
| There are 2 main ways that a transaction can not | | | | contact us on 1300 QUINNS or click here to submit an |
| incur Capital Gains Tax. | | | | online enquiry. |
| The first is on the basis that the capital gain/loss was | | | | |