Hey everyone. I recently made a capital gain of about $20k this financial year by buying and selling shares. I have a taxable income of about $6k. This is the first time I’ll need to pay tax here in Australia so I’m a bit confused about how much tax I’ll owe this year. I’ve tried out CGT calculators on various websites and they give me a capital gains tax of around $1500. I’m not sure if this includes the income tax or if that will be calculated separately to the CGT. Any help will be appreciated.
Income Tax and Capital Gains Tax Calculated Separately?
Limmortanwayne on 14/06/2021 - 19:17
Comments
So if my total income including capital gains turns out to be $26k then I’ll pay a single tax based on whatever tax slab my income fits into?
Yes.
Thanks. I got a bit confused as I haven’t paid tax here before.
@immortanwayne: It might be worth doing some reading or speaking to an actual tax agent - "residents" have access to the 50% discount method, but non-residents do not, for instance:
https://www.ato.gov.au/general/capital-gains-tax/internation…
You will need to figure out which rules apply to you, etc.
@Crow K: Yeah I’ll probably talk to a tax agent. I didn’t hold my shares for more than 12 months so the discount doesn’t apply to me anyway.
It might be worth doing some reading or speaking to an actual tax agent
You don't need to see a tax agent for a $20k capital gain. Given OP didn't hold it for over a year, it's just income.
you'll also get a buy-sell summary from the stock broker in few months
Say if u have assets like bitcoin but haven't reported to tax office for years what to do
I recently made a capital gain of about $20k this financial year by buying and selling shares.
Did you hold the shares for longer than a year? If so, then it is a capital gain, if not, then it is classified as income.
If it is income, then the $20k will just be added to your taxable income. If it is capital gain, then it will be halved, then added to your taxable income (i.e. you get a 50% discount on your capital gains before tax).
This is entirely incorrect. Shares bought and sold within a year are still capital gains. Shares are a capital asset.
Trading incredibly frequently in a business like manner will turn you into running a business of share trading, and then shares will become your trading stock - that's the only circumstances in which a share sale would not be a capital gain.
Check with a tax agent on whether you would be classified as a "temporary resident", if yes, you may eligible for temporary resident rules. The same treatment as a foreign resident (i.e. no CGT on certain assets).
So if you actual capital gain ends up being $20k, you would write $20K in a box on your return to be added up with everything else. It's the same tax treatment as receiving $20k of interest, or net rent income etc.