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Capital Gains Tax basics for Australian Taxpayers
Capital Gains Tax (CGT) is a tax levied on gains realised by Australian taxpayers on their Capital Gains Tax (CGT) assets. Although Capital Gains Tax (CGT) is not imposed as a separate tax, it is categorised as a separate class of statutory income.
Whilst taxable Capital Gains are subjected to different aspects of tax law, Capital Gains are ultimately included and taxed with your other income on your Annual Australian Income Tax Return. For Australian resident taxpayers, Capital Gains Tax also applies to assets located outside Australia.
WHAT ARE CAPITAL GAINS TAX (CGT) ASSETS?
All assets acquired since the Capital Gains Tax legislation came into effect (on 20 September 1985) are affected by the Capital Gains Tax regime unless specifically excluded under the law.
Some common examples of Capital Gains Tax (CGT) Assets are:
- Real Estate
- Equity (stock) Investments
- Managed Fund Investments
Some less common examples of Capital Gains Tax (CGT) Assets are:
- Business Goodwill
- Rights and Options
- Convertible Notes
- Contractual Rights
- Foreign Currency
- Improvements to Pre-CGT Assets
- Personal Use Assets (e.g. boats)
- Collectible Assets, such as: paintings, sculptures, drawings, engravings, photographs or other works of art; jewellery, postage stamps, rare books, coins, medallions or other antiques.
CGT RECORD KEEPING
It is important to keep adequate records with regards to your Capital Gains Tax Assets to ensure that your Accountant can obtain the best result for your tax return.
Some examples of the information your Accountant may require are:
- Dates of acquisition and disposal for the CGT asset
- Contract documents associated with the acquisition and disposal of the CGT asset
- Dates and details of expenses incurred in acquiring the CGT asset
- Dates and details of expenses incurred in disposing of the CGT asset
- Other documents associated with the acquisition and disposal of the CGT asset, such as conveyancer settlement statements
- Contract documents associated with improvements to the CGT asset
- Dates and details of other expenses incurred in improvements to the CGT asset
- Dates, details and valuations upon changes in use of the CGT asset
- Dates and details of income derived from holding the CGT asset
- Dates and details of expenses incurred in holding the CGT asset
Contact us at TAXOLOGY to discuss your needs with regard to your Capital Gains Tax assets. We would be pleased to assist you in preparing for your next Capital Gains Tax event.
The information detailed above is only intended as a general overview and may not be relevant to your particular circumstances. Please contact us for specific advice with regard to your personal situation.
TAXOLOGY is an Australian Accounting & Taxation services firm catering to Australian taxpayers in all locations.
Visit our website: taxology.com.au