Hey all – first post!!!!!
Nice easy one for all you guru’s out there:
For the calculation of Capital Gains Tax payable (in my case – an approximation). Is regard given to holding costs (rent, interest, principle) in the calculation??? Or is the amount of CGT payable purely just a function of the difference of the purchase price (+costs) and sale amount (+costs) x 50% x tax rate???
A quick expanation why would be great too if someone could spare two seconds!!!!!!
cheers
Best to check with your accountant or telephone the Taxation Office or even check out their website – http://www.ato.gov.au
My understanding is that rent, interest etc are claimed in your income tax return each year, and the capital gains tax is calculated on the profit, i.e., difference between purchase and selling prices with buying and selling expenses allowed for, then reduced by 50% if you have held the property for more than 12 months. This amount is then added to your taxable income for the year and tax is paid at your marginal rate.
Watch out if you are selling close to 30th June. The capital gain is triggered when you sign the contract. By signing in July you don’t have to declare the profit (and pay the tax) until the end of that financial year.
But I’m no guru, check it out.
MargMarg
good stuff – thanks for your time!!!
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