Capital Gains Tax

When you sell an investment, you are taxed on the gain you make – this is called Capital Gains Tax (CGT).

CGT is calculated by taking the capital proceeds (sale amount) less the cost base (purchase amount) of the investment.

All your capital gains and losses are added together for the year and if the resulting amount is positive (you made a gain) it is added to your taxable income. You then pay normal marginal tax rates on this income.

For example: Investment Property

Capital Proceeds:

sale price $500000
less agent commission $20000
less advertising $10000
less legal fees $1000
capital proceeds $469000

Cost Base:

purchase price $400000
plus stamp duty $20000
plus legal fees $1000
cost base $421000

Capital Gain:

capital proceeds $469000
less cost base $421000
capital gain $48000

The $48,000 capital gain is added to your other taxable income for the year.

Make sure you speak to one of our experts today to show you how to eliminate Capital Gain Tax issues.

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