Capital Gains
3. Capital Gains Tax Assets
Authors: Whitehead Michelle
Firm / Chambers:
Last updated: 13 Sep 2015
- The purpose of CGT is to include the profit you make from selling assets in your net income prior to calculating your income tax.
- A capital gain is made if an asset increases in value between the time you purchase or acquire it and the time when you sell or dispose of it.
- Not all assets are subject to CGT. Assets are generally exempt from CGT if they were purchased before 20 September 1985 (‘pre-CGT assets’). No CGT will be payable on assets acquired before that date.
- Assets may be divided into three categories for the purposes of calculating CGT. These are collectables, personal use assets and other assets.
- ‘Collectables’ include items such as paintings and sculpture, jewellery, antiques, models and rare stamps, books and coins. Collectables are CGT assets if their market value when they were acquired was over $500. If you make a capital loss when you sell a collectable, you can only offset this loss against capital gains made on other collectable assets.
- ‘Personal use assets’ are everything (other than collectables) that is used mainly for your personal use or enjoyment. This may include items such as cars, boats, household furnishings and electrical goods. However the category excludes land and buildings. You do not have to pay CGT on any personal use asset that was acquired for less than $10,000.
- The ‘other assets’ category includes a wide range of assets, covering land and company shares, leasehold interests, goodwill, interests in a trust, the land around your home beyond a certain area, rights arising under a contract, foreign currency, foreign property and in some circumstances capital improvements made to pre-CGT assets.
View more Information on Tax & Superannuation