My income for this financial year will be below the $18,200 tax threshold so I will be paying no tax (I think that's right!).
My question: is this a good time to sell shares where I have made capital gains? Am I right in thinking that the capital gains (on my shares) is treated as income if sold in this financial year or will CGT be paid even though I will below the tax threshold.
Capital Gains Tax - Selling Shares
tims on 07/07/2015 - 08:53
Comments
I'm no adviser nor accountant.
Am I right in thinking that the capital gains (on my shares) is treated as income if sold in this financial year or will CGT be paid even though I will below the tax threshold
The former. Capital gain is counted towards your taxable income. So if your salary/wage + capital gain + other taxable incomes is below the tax-free threshold, then you do not pay any tax. However as @erwinsie said, capital loss cannot be used to offset your other income.
It's a good question 2 weeks ago. However it's July and whatever you sell right now would count towards 2015-2016 financial year.
Not adviser either
Also CGT rate depends on how long you've held the capital assets.
If you've held for less than 12mths it isn't a good time to sell. CGT reduces once they have been held for longer (unless they've changed the rules - I'm not up to date, I'm not an advisor)
Thanks for your replies. Just found this at the commbank website which confirms your answers.
"How much tax will you pay?
……Your marginal tax rate, which is the portion of your income you pay in tax, is important because your capital gain will get treated in the same way as any other income on your tax return for that year. So, if you earn $80,000 or less in FY15 then you will pay a smaller amount of tax on your capital gain than someone who earns $80,001 or more, for example.
View individual income tax rates at the Australian Tax Office website
The length of time you hold your shares is relevant because individuals can usually discount a capital gain by 50%, meaning you may pay less tax, if you have held the asset for more than 12 months."Should of sold them a few weeks ago. Unless your planning not to earn much this year either.
im not adviser
if your gains from the shares combined with your income is still below that threshold then no tax.
cgt is just different name for income.
why need to have different name? because only cgt can offset each other between gain and losses.
you cant offset cgt loses with your salary for example.
hope what i understand above is correct :)