Newspaper article The Morning Bulletin (Rockhampton, Australia)

Despite Confusion, CGT Is the Best Tax to Pay

Newspaper article The Morning Bulletin (Rockhampton, Australia)

Despite Confusion, CGT Is the Best Tax to Pay

Article excerpt

YOUR FINANCES

With Noel Whittaker

EVEN though capital gains tax has been with us for over a quarter of a century, there is still much confusion about the way it works.

If you have to pay tax, CGT is the best one to pay because it is not triggered until the asset is sold and, provided you have kept it for over a year, you pay tax on just 50% of the net profit.

This means that the maximum rate of CGT for the highest income tax payer in the land is just 23.25% for assets that have been held for over a year.

There is no set rate of CGT. In the year the asset is disposed of, the net proceeds are simply added to your taxable income with a resulting increase in the amount of tax you have to pay.

Obviously if you can lower your income in the year of sale you may pay less CGT because you will be in a lower tax bracket. …

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