Can I reduce the amount of C G tax by being retired or unemployed i.e. have no other income to be taxed on.
If this makes any sense please reply.
Ron.
Hello investron
You CG is just added onto your other income in the year that it is earned. Naturally having no other income for that year will mean you will pay less tax on this CG.
The 1st $6K would be tax free.
$6k to $21K would be taxed at 15%
$21K to $75K would be taxed at 30%
over $75K would hit the 40% bracket. [glum2]Don’t forget that if it’s your PPOR and has never been used to produce income than it’s CGT exempt.
If it’s an IP and you have had it for more than 12 months and it’s not held in a company, then you are entitled to 50% discount on your CG.
I think it would be a good idea to consult a good accountant before you do anything else.
Hope this helps [smiling]
Elka“”If it’s an IP and you have had it for more than 12 months and it’s not held in a company, then you are entitled to 50% discount on your CG.””
Just to clarify the period of time you hold the asset is not the defining period but the date of the purchase and sale contracts.
You can go to Contract on the 1st January 06 but not settle until 30th June 06 and the resell the asset with a Contract date of 2nd January 07 (settling on the 3rd January 07) and still benefit from the halving of the CGT.
Cheers
Richard Taylor
Residential & Commercial Finance Broker
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Hello Richard
Thank you for that clarification. I didn’t realise that.
Elka
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