Capital Gains Tax CGT

If you sold assets during the year, such as property or shares, you need to work out your capital gain or loss for each asset.

In simple terms when you sell an asset for more than it cost you, you have a capital gain. If it’s less than it cost you, you have a capital loss.

You pay tax on your net capital gains. In other words your total capital gains, less any capital losses, less any discount you are entitled to on your gains.

There is a capital gains tax (CGT) discount of 50% for Australian individuals who own an asset for 12 months or more. This means you pay tax on only half the net capital gain on that asset.

There are some assets that are exempt from CGT such as your family home. The ATO provides a list of exemptions here.

Let’s look at an example of CGT with a discount

Hannah, an Australian resident, buys a block of land. She owns it for 18 months and sells it, making a profit of $20,000. She has no capital losses.

Hannah is entitled to the 50% CGT discount for the land. She will declare a capital gain of $10,000 in her tax return.

CGT ATO Calculator

To get a sense of what you may pay in CGT the ATO has a CGT Calculator you can use.
For more information simply ask me at paul@congdonfuzi.com.au