what is capital gains tax

Capital Gains Tax by Ed Chan with Your Investment Property Magazine

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Ed Chan, Chan & Naylor’s founder and non-executive chairman, was interviewed at Your Investment Property magazine to talk about Capital Gains Tax.

What is capital gains tax?

Capital gains tax (CGT) is the tax you pay when you gained profits from the sale of an asset.

As told by Ed Chan in the interview, whether you are a resident or non-resident of Australia, if you make any kind of money from any asset, you get taxed for it.

When it comes to property investments, Australian residents get a 50% discount for a property held for 12 months or more, while non-residents get taxed for every dollar worth based on a fixed rate.

CGT for residents, in contrast, are calculated based on a personal tax rate (after the 50% discount if you’ve held the property for 12 months above).

How to avoid CGT

According to Ed Chan, CGT is difficult to avoid. The only way you can minimise or avoid capital gains tax is by having the property under the name of a person with a lower personal tax rate.

However, as most property are negatively geared on initial purchase, you’d want the property under the name of a person with a higher personal tax rate because tax refunds are calculated based on that rate.

Ed Chan’s advice is to put the property under the name of a person with a higher tax rate and simply wear the higher CGT later on the balance sheet.

Head on to the post for the full interview or check the video down below.


Need capital gains tax advice for your property? Contact a Chan & Naylor accounting specialist here

Aside from CGT assistance, have a look at our other accounting and advisory services designed to help you achieve greater financial success.

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