Capital Gains Tax

The Capital Gains Tax (“CGT”) regime was introduced in Australia with effect from 20 September 1985.

Capital Gains tax in Australia is not a separate tax; it forms part of the income tax structure, with capital profits (as calculated and adjusted) being added to taxable income and taxed at the taxpayer’s marginal rate.

As such there is no stand-alone capital gains tax rate.

However the capital gains tax rules operate to modify the amount of capital profit which is included in a taxpayer’s income, the effect of which in many situations is to reduce the effective rate of tax applicable on the capital gain.

Additionally there are specific and common exemptions of certain kinds capital profit from tax, one of the most common of which are gains made on the sale of a principal place of residence.

  • What Is Capital Gains Tax (CGT)?
    CGT applies generally to net gains made on disposal of capital assets, where the amount receivable is greater than the costs, and reduced by any capital losses.
  • Capital Gains Tax Discount
    From 21 September 1999, a discount of the amount of the capital gain on which income tax is paid is available, subject to qualifying conditions including residence.
  • Capital Gains Tax Rate
    Because the Capital Gains Tax is not a separate tax, there is no capital gains tax “rate” as such. The same income tax rates apply to ordinary income and net capital gains income.
  • Capital Gains Tax On Home (main residence exemption)
    In general, there is no capital gains tax on the sale of your main residence. There are a number of qualifying conditions and extensions and in some situations a partial exemption applies.
  • CGT and Non-Residents
    In general, capital gains made by a non-resident are assessable only in relation to taxable Australian property.
  • CGT and Small Business
    Small businesses are eligible for special capital gains tax concessions, with the retirement concessions tied into the superannuation rules recently enacted rollover relief for small business re-structures.

Tax returns – Capital Gains Tax Guide

Each financial year the ATO publishes an update of their Capital Gains Tax Guide (online format). See:

 

This page was last modified 2018-06-27