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Capital Gains Tax

A capital gain tax is a type of income tax that is essentially a on the gains from the realisation of assets where the realisation is not part of the carrying on of a business.

Broadly, these include most kind of property (legal or equitable), such as:

land and buildings
shares in a company
units in a unit trust
options
debts owed to you
right to enforce a contractual obligation
foreign currency

There are special reliefs available when certain events occur.

Pre 20 September 1985 assets

Capital gains tax applies to disposal of assets acquired on or after 20 September 1985. Therefore, the gain on the disposal of assets acquired prior to 20 September 1985 are not liable to capital gain taxes.

Re-structuring and re-organisation

In the case of re-structuring your business, a roll over relief can delay the making of a capital gain. In one case, as a sole trader or partnership, you may obtain a roll-over if you transfer all the assets of a business to a company.

Replacement asset roll-overs

In this special case, you may defer the making of a capital gain. It involves your ownership of one asset ending and you acquiring another one (the replacement).

Discount on gain

A discount may be available on capital gains that happen on or after 21 September 1999, if the asset involved has been held for at least 12 months. The discount is one half of the capital gains for individuals and trusts, and one third of the capital gains for complying superannuation entities.