Week 7 _ Lecture _ CGT.pptx - AUSTRALIAN TAXATION LAW Lecture 7 CAPITAL GAIN TAX(CGT(ATL chapter 7 8 Dr LeThuy Tran Course organization Part 1 1 Part

Week 7 _ Lecture _ CGT.pptx - AUSTRALIAN TAXATION LAW...

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AUSTRALIAN TAXATION LAW Lecture 7: CAPITAL GAIN TAX (CGT) (ATL chapter 7 & 8) Dr. Le- Thuy Tran
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Course organization Part 2: Indirect & State Taxes Part 2: Indirect & State Taxes Part 1: Overview & Structure Part 1: Overview & Structure Toda y Part 3: Incom e Part 3: Incom e Part 4: Investm ent & Busines s Entities Part 4: Investm ent & Busines s Entities Part 5: Avoida nce & Admini stration Part 5: Avoida nce & Admini stration
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Course overview 4. Income from Personal service & employm ent 3. Good &Service Tax 2. The taxation formula Toda y 5&6. Fringe Benef t Tax (FBT) 8. General Deductio ns 1. Introduct ion Australi an Taxation Law 10. Presenta tion 9. Taxation of Corporat e Entities 11.Tax Administrat ion, Planning, avoidance and Internation al aspects 7. Capital Gain Tax (CGT)
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1. Introduction to Capital Gain Tax (CGT) 2. CGT Time, Assets, Exemptions and Roll-over Relief 3. Calculation of Capital Gain 4. Calculation of Capital Loss 5. Main Residence Exemption, Part Income Producing Use and Changing Residency for Tax purpose Lecture 7 : CAPTIAL GAIN TAX (CGT) OVERVIEW
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LEARNING OBJECTIVES (chapter 7 and 8) At the end of this lecture, you should be able to : Outline the fundamentals of capital gains tax (CGT) Calculate the capital gains or losses List some major CGT exemptions
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KEY CONCEPT Capital Gains Capital Losses Net Capital Gain Cost Base Capital Proceeds Roll-over CGT Asset CGT Event
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(I). INTRODUCITON: A gain characterised as capital is not subject to income tax under ordinary concepts. Capital gains tax (CGT) commenced on 20 September 1985 and brings capital receipts into the tax base. A taxpayer’s income tax liability includes a net capital gain:
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INTRODUCTION: CGT EFFECTS ON TAXPAYER Ultimately, a “net capital gain” is included in the taxpayer’s assessable income. Liability to CGT is determined by following the process:
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INTRODUCTION: CGT EVENT A taxpayer only makes a capital gain or loss if a CGT event occurs: s 102-20. Sometimes, more than one CGT event will happen. Generally, the most specific to the situation is used: s 102-25(1). 52 CGT events exist. For summary of CGT events, see s 104- 5. The following key CGT event are covered in these slides: CGT event A1 – Disposals
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1. Introduction to Capital Gain Tax (CGT) 2. CGT Time, Assets, Exemptions and Roll-over Relief 3. Calculation of Capital Gain 4. Calculation of Capital Loss 5. Main Residence Exemption, Part Income Producing Use and Changing Residency for Tax purpose Lecture 7 : CAPTIAL GAIN TAX (CGT) OVERVIEW
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TIME OF THE CGT EVENT (ATL 7-550 ~570) Time of acquisition of the CGT asset is generally when the taxpayer becomes its owner (s 109-5(1)). When acquiring a CGT asset as a result of a CGT event, specific rules in s 109-5(2) apply first, for example: Where CGT event A1 occurs, the taxpayer acquires the asset when the disposal contract is entered into or if none, when the entity stops being the assets owner.
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CGT ASSET Important to classify CGT assets into their relevant categories (special rules apply to each):
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CGT ASSET: COLLECTIBLES Defined in s 108-10(2)
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