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Items of plant being depreciated are subject to CGT, but only in the unusual case that they are sold for more than original cost (see Depreciating assets below) The capital gains tax law is expressed in terms of a set of 52 CGT events (see ITAA 1997 section 104-5), each of which specifies results such as gain, loss, or what cost base adjustment are to be made, and how to determine the date to use for the transaction.
The indexation method is as follows: With only capital gains - the discount method is usually better (note indexation is better for small (perhaps only very small) gains).
The reduced cost base of a CGT asset has the same five elements as the cost base, except for the third element.
Greg acquired a rental property on 1 July 1998 for 0,000 and makes improvements of ,000.
A capital gains tax (CGT) was introduced in Australia on 20 September 1985, one of a number of tax reforms by the Hawke/Keating government.
The CGT applied only to assets acquired on or after that date, with gains (or losses) on assets owned on that date, called pre-CGT assets, not being subject to the CGT.