Capital Gains Tax - Research Paper Example

(Market Value $ 40,000 Less Asset Cost $ 50,000 = Capital loss $ 10,000). However being a depreciable asset this amount can not be set off against the capital gains from the other assets. Under the uniform capital allowances system that applies from 1 July 2001, any gain or loss from a depreciating asset is included in your assessable income, or deductible as a balancing adjustment, to the extent the asset was used for a taxable purpose (for example, to produce assessable income). The small business CGT concessions do not apply to gains you make on depreciating assets that are included in your income under the uniform capital allowances system.

The Capital Gains resulting from Goodwill is subject to the Capital Gains Tax. In the instant case there is a capital gain of $ 15,000 (Market Value $ 90,000 Minus Cost $ 75,000) which will be included in the taxable capital gains. The capital gains resulting from land and buildings is also to be included in the capital gains tax calculations. The transaction would result in a capital gain of $ 50,000 (Market Value $ 200,000 minus cost $ 150,000) that will be attracting the capital gains tax.

When the net assets value under the Maximum . When the net assets value under the Maximum Net Asset Value Test the value of the net assets does not exceed $ 6 million. Net assets for this purpose does not include shares, units or other interests, non-business assets, personal assets including the home. The Net asset value is calculated as the market value of the assets minus liabilities relating to those assets.When the turnover of the business doesn't exceed $ 2 million When the CGT event giving rise to the capital gain happened after 11.

45am on 21 September 1999, and When the assets involved are owned the asset involved for at least 12 months.Under the Active Asset Test if the business is still existing and the assets are owned for less than 15 years the asset must be an active asset just before the CGT event and for at least half of the period of ownership. For an asset to be termed as 'active asset' it must be and is used or held ready for use by a small business CGT affiliate, or an entity connected with the small business, in the course of carrying on a business, or an intangible asset inherently connected with a business being carried on by the entity (for example, goodwill)"The CGT discount isn't limited to capital gains from business assets.

The discount allows individuals (including partners in partnerships) and trusts to reduce their capital gain by 50%"1Small business CGT concessions"The following four CGT concessions are available only for small business.1 The small business 15-year exemption provides a total exemption for a capital gain on a CGT asset if you have continuously owned the asset for at least 15 years and the relevant individual is 55 or over and retiring, or is permanently incapacitated.2 The small business 50%