Reducing Capital Gains Tax

Preparation is critical to minimising your capital gains tax at the end of the financial year. 

Capital gains tax (CGT) is the tax you pay on any capital gain made when you sell or otherwise dispose of an asset. CGT forms part of an individual’s income tax; it is not a separate tax. 

Some examples of a CGT event include selling or giving away an asset, the loss or destruction of an asset, shares which are cancelled, surrendered or redeemed worthless, and so on. 

Here are five strategies to help minimise your CGT bill: 

Utilise the small business CGT concessions 

Small business entities may be eligible to use a number of CGT concessions, in addition to other CGT exemptions, roll-overs and concessions which are available more widely. Small businesses can apply as many concessions as they are entitled to until the capital gain is reduced to nil. 

Hold an asset for at least 12 months 

Individuals and small businesses (excluding companies) can generally discount a capital gain by 50 per cent if they hold the asset for more than 12 months. 

Offset a capital loss against a capital gain 

Selling poor performing assets that will yield a capital loss before 30 June allows individuals to use the capital loss to offset their tax liability from any capital gains realised this financial year. 

Defer asset sales 

If you expect to make a capital gain on the disposal of an asset, consider deferring the sale until after 30 June. This strategy is particularly beneficial for those who expect to be earning a lower taxable income in the next financial year, for example, individuals who plan to retire or take unpaid leave. 

Carry forward capital losses 

Capital losses from previous years can be carried forward to offset capital gains in the current financial year, thereby reducing CGT liability. 

Contact the experts at Bush & Campbell on 02 6938 4600 to help you implement these capital gains tax tips.

Cristy Houghton

Embarketing, 48 Johnston Street, Wagga Wagga, NSW, 2650

Cristy's unique career has taken her from country NSW to the city lights of Clarendon Street South Melbourne and back again. With an early career in radio as a copywriter and creative strategist, she is now a Jill of all trades as a graphic designer, website builder, blog writer, video editor, social media manager, marketing strategist and more. 

In fact, give her any task and this chick will figure out how to do it! Go on, we dare you!

No, really, we DARE you!!

Cristy has won two Australian Commercial Radio Awards (ACRAs) for Best Ad and Best Sales Promotion, and even has an 'Employee of the Year' certificate with her name on it.

Cristy and her husband James have traveled extensively through Russia, China and South East Asia, and have two fur-babies, Sooty (cat) and Panda (puppy). Cristy loves drinking coffee, meeting people to drink coffee, coffee tasting and coffee flavoured cocktails. She also enjoys road trips, TED Talks and watching cat videos on youtube.