it's the same as your income tax rate, afaik http://www.ato.gov.au/individuals/content.asp?doc=/content/20427.htm&page=6&H6
That link isn't very clear though. If my income was only $1000 this year (and thus my tax rate is 0%) does that mean my CGT rate will be 0% as well? Even if I sell $100K worth? I'm guessing more likely is that any capital gains should just be treated as another source of income. A big CG would put me into a higher tax bracket.
Tell me about it. I had to sell over half my position a couple months back and it felt like cutting off my damn arm. I won't be in any hurry to do that again anytime soon, I assure you!
Yes it is treated as another income in that if your tax rate is 0% and you have a large anough capital gain to push you into the next tax bracket - you will pay tax on the amount above the threshold (ie if you make $10000 profit and this pushes you $2000 into the next tax bracket - then you will pay that tax bracket rate on the $2000). Dont forget though - that if you have held the "asset" for more than 12 months only 50% of the capital gain is counted for tax purposes. malachii
We used to have a system when capital gain was calculated with adjusted inflation number each year, but the government figured out only those people will pay capital gains who made real profit and they did not like that idea. So they changed to this new system in witch you will pay tax even if you make lage capital loss in purchasing power.
Ah lots of good answers. Now I wonder how cgt applies in relation to gift-giving: let's say I give my girlfriend some silver bars. When she sells, irrespective of how much higher they sell compared to their purchase price, no CGT is payable right? If at some later time she decided to give me a gift (say a new plasma tv or something) again all tax free. Am I missing something?
http://www.ato.gov.au/corporate/content.asp?doc=/content/00208572.htm&page=2&H2 Acquiring CGT assets and keeping records Generally, the time you acquire a CGT asset (your 'acquisition date' for CGT purposes) is when you become its owner, most commonly because you have bought it or received it as a gift or it was transferred to you. Your records must be in English (or be readily accessible in or translatable to English) and must show: * the nature of the act, transaction, event or circumstances * the date it happened * the parties to the transaction, and * how the act, transaction, event or circumstances are relevant to working out the capital gain or capital loss. The following are examples of the types of records you may need to keep: * receipts of purchase or transfer * details of interest on money you borrowed relating to this asset * records of agent, accountant, legal and advertising costs * receipts for insurance costs, rates and land taxes * any market valuations * receipts for the cost of maintenance, repairs and modifications, and * accounts showing brokerage fees on shares. If you received an asset as a gift and you did not get a market valuation at the time, a professional valuer can tell you what its market value was at the relevant date. Therefore your girlfriend's cost base of the silver bars will be their market value at the date of transfer/gift. Taking this one step further, you will have a CGT event when you give the gift as the price of the bars will have changed since you purchased them. Your disposal proceeds will be the market value of the bars at date of transfer, ie: your girlfriend's cost base. If you bought the bars 2 days earlier, I'd give the receipts to her, in which case you wouldn't have a CGT event as she could claim to be the owner from day 1.
I bought some beautiful Privy Kooks of an old fella recently. He has no one left to pass them onto or no reason to own them anymore. I hope I never end up in the same situation.
So this means CGT is payable even on a gift-giving event. The fact that no actual money was made is irrelevant to the ATO they just go by what the theoretical gain would have been had the item been sold. All I can say is, that SUCKS! Oh well.
