What you need to know about Capital Gains Tax (CGT) 

Capital Gains Tax (CGT)


Rede Accountants Gold Coast, Brisbane & Toowoomba


Capital Gains Tax (CGT) was first introduced to Australia on 19th September 1985. Prior to the introduction of Capital Gains Tax (CGT) if you owned an asset it would generally retain a capital gains tax free status. Any assets acquired after that date were then subject to the taxing rules.

If you are an Australian resident for tax purposes, all of your assets fall into this net. It doesn’t matter where they are located, whether that be within Australia or in another country, the rules still apply to these assets. The assets generally include real estate, shares, managed funds, business assets, farms, antiques and many other things. There are however some assets that are exempted from the rules which can include most family homes with a land area less than 2 hectares, cars, Australian cash and some private assets.

To discuss exempt assets further with Rede Gold Coast & Tweed Heads Accountants you can book a free consultation here or by calling 1300 399 599.

A gain on the sale of an asset is calculated as the proceeds of sale less the purchase price of the asset.

For example, if I sell a property for $100,000 which I purchased for $50,000, the gain is $50,000

If the asset is held longer than 12 months, generally, 50% of the gain is tax free. However, be aware that companies do not receive this concession. In the previous example, a taxpayer would be taxed on $25,000 of the gain rather than $50,000. If the asset is held for less than one year, there is no 50% concession.

Business sales are also subject to capital gains tax provisions. Small business sales may attract a number of capital gains exemptions and if structured correctly can be extremely tax effective. Rede Gold Coast &  Tweed Heads accountants can provide valuable advice as to whether your business meets these criteria.

Sometimes a capital loss may be made from the sale of an asset. This has been common in recent times with share sales. These losses can only be offset against capital gains. It there are no capital gains available, the losses can be carried forward forever or until such time as you make a capital gain. They can’t be offset against your other income.

There are special rules dealing with deceased estate assets, marriage breakdown settlements, business sales, foreign residents selling Australian based assets and Australia citizens becoming non-residents.

The capital gains tax rules are complex. We recommend you consult your accountant before buying or selling an asset or for any event you think may have capital gains implications, which is just about everything. Rede Brisbane & Gold Coast Accountants are also able to assess your current position and advise as to potential capital gains issues.

Rede Accounts have been serving the business sectors across Brisbane & Gold Coast and everywhere in-between for the last 37 years. Not only do we provide help with Capital Gains Tax and other related matters but we provide expert advice and go above and beyond for our clients.

Book a FREE consultation with Rede Gold Coast & Brisbane accountants online here or by calling 1300 399 599.

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