Capital Gains Tax 2020

If you sell your different types of capital asset, such as real estate or shares, you can make a profit or loss for a particular capital. This cost describes acquiring the asset and disposing of the asset.

You must report capital gains and losses in your income tax return when you lodge in the financial year and pay tax on your capital gains, it doesn’t matter if you made gains or losses. It’s called Capital gain Tax (CGT) and this is the part of your income tax, you don’t need to lodged separate in your return.

If you sell your capital asset and you make profit on it, this gain will be added to your assessable income and may increase your tax liability. Tax withheld for capital gains is a different thing so you may need to calculate how much money you own and cover the relevant amount in your return.

If you sell your capital assets in this situation you make a loss on it, you can reduce your liability against it.

All assets you don’t need to pay tax on it, If you purchase your assets before 20 September 1985. So, all assets you have acquired since tax on capital gains.

  • Personal assets are exempt from CGT, including your home, car, furniture etc.
  • If you use solely for taxable purposes like business equipment or some fittings in rental property, so CGT doesn’t apply on depreciating assets.

You need to keep in mind that you made capital gain or losses must you enter into contact for dispose of assets rather than settle your assets. So if you sign a contract of sale for any investment property in July 2017 and settle in September 2017, you need to report gain or losses to ATO through 2016-17 tax return in the financial year.

If you are Australian resident, CGT will apply to your worldwide income. However, If you are Foreign resident for tax purposes and you made gain or loss, CGT will apply on assets that are ‘taxable Australian property’.

For more information on online tax return 2020, Tax Return 2020, myGov 2020, myTax 2020 or any other tax related matter, please call our professional accountant on 1300 768 284 or you can email us at

Depreciation and Capital Expenses and Allowance

You generally can’t deduct spending on capital assets immediately; instead you claim the cost over time, reflecting the asset’s depreciation (or decline in value). This applies to any taxpayer who uses depreciating assets to earn assessable income, including:

  • businesses, small and large
  • rental property investors
  • employees (for equipment and tools they provide at their own expense for use in their work).

A depreciating asset is one that has a limited effective life and can reasonably be predictable to decline in value over the time it’s used. Land, trading stock and some intangible assets are not depreciating assets.

Small businesses (those with an aggregated annual turnover of less than $2 million) can choose to use easy depreciation rules, which among other concessions allow you to instantly write off assets that cost less than $20,000 each Other businesses and persons (including property investors and employees) use the general depreciation rules, which set out the amounts (capital allowances) that can be claimed, based on the asset’s efficient life.

Under the general depreciation rules, a direct write-off applies to:

  • items costing up to $100 used to earn business income (but note the higher immediate write-off limit for small businesses mentioned above)
  • items costing up to $300 used to earn income other than from a business (such as employee-provided tools and equipment)

For more information on myTax 2018, myGov 2018, Online Tax Return 2018 , or any other related matterplease contact us at 1300 768 284 or you can email us at

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