Capital Gains Tax:

In general terms, a capital gain (or a capital loss) is the difference between what it originally cost you to get an asset compared to what it cost you to dispose of the asset. For example, if you have an investment property that was originally purchased for $300,000 and you sold the property for $350,000, broadly speaking your capital gain is $50,000. Therefore you would, pay tax on the $50,000 gain that you made as it is your ‘capital gain’. The tax you pay is not a separate tax as is commonly believed, instead the tax forms part of your income tax even though it is commonly referred to as ‘Capital Gains Tax’ (CGT).

If you have a capital loss, you are not able to claim this loss as a tax deduction to reduce your taxable income. However you can use the capital loss to reduce the amount of tax payable on a capital gain in the same income year. Sometimes, when you have multiple assets, you may make a capital loss that is greater than any capital gains that you make in the same income year. Where your capital losses are greater than your capital gains, you can generally carry forward your capital losses to a future income year to offset any future capital gains.

Our experienced team of tax lawyers can assist you in determining your CGT liability and can give you tax advice on CGT matters including:

• The acquisition of CGT assets;
• The disposal of CGT assets;
• Other circumstances that may create a CGT event;
• CGT implications on inheritances and deceased estates;
• CGT considerations in relation to asset protection;
• How marriage, divorce and other involuntary disposal of assets affects your CGT liability;
• Investment schemes and CGT liability; and
• The rollover of a CGT loss.

There are methods provided for in the taxation legislation that allow for the reduction of your CGT liability. However, these methods can sometimes be difficult to understand and the ATO is regularly revising and making tax rulings to apply the law to different taxpayers’ situations. Our tax lawyers can provide you with advice in relation to your CGT liability and guide you through the CGT legislation to reduce the risk of you making a mistake and the ATO imposing penalties upon you. Our tax lawyers can further assist you with complying with the CGT laws and how the laws will apply to the disposal or acquisition of your CGT assets.

Our tax lawyers can meet with you to discuss your tax affairs and consider how the CGT laws may apply to your situation. To book a consultation, please contact our firm by telephone on (02) 9233 4048 or by email at info@navado.com.au.

This webpage (and any material or wording appearing on this webpage) is provided for general information purposes only and does not constitute any Legal Advice. It does not take into account your objectives, your instructions or all of the relevant facts and/or circumstances. Navado accepts no responsibility to any person who relies on the information provided on this website. We further refer you to our Disclaimer.