Capital Gains Tax (CGT) is a crucial concern when selling an taxable asset, especially real estate.
The ATO succinctly defines Capital Gains Tax as:
The Tax you pay on profits from selling assets, such as property.
You report capital gains and losses in your income tax return and pay Tax on your capital gains. Although it is referred to as ‘capital gains tax,’ it is part of your income tax. It is not a separate tax.
If you have a capital gain, it will increase the Tax you need to pay. You may want to work out how much Tax you will owe and set aside funds to cover it.*
The essential ‘take-away’ here is that Capital Gains Tax(CGT) is not a separate tax but part of your income tax, which means that when you make a capital gain (for example, from the sale of a property or business), the gain is added to your assessable income. Capital gains may thus significantly increase your assessable income and your income tax.
Since Capital Gains Tax has serious tax implications, it’s vital to navigate this area adeptly. Under Australian tax law, there are numerous concessions and exemptions that, correctly applied, can reduce your income tax liability by thousands of dollars (or more, depending on the scale of the disposed asset).
EndureGo Tax is a Capital Gains Tax service provider helps more and more people manage their CGT liabilities every year. Talk to one of our accountants today about how to improve your CGT position.
As a leading professional CPA accounting firm with offices in Ashfield, Sydney, and Northern Beach, Adelaide, we’re ready to get your finances and tax affairs optimized. Call EndureGo today for an initial free 15 minute telephone consultation with John and his team on 1800 841 312.