Capital Gains Tax

A capital gain (or loss) is the difference between what it cost when it was purchased and is received when it is sold.  A capital gain is treated by the ATO as taxable income, but a capital loss can’t be offset against your income.  You can however, use a capital loss to reduce a capital gain in the same year and you can carry forward a capital loss indefinitely.


There are a number of strategies that can be used to counteract your capital gains tax (CGT) obligations including:

  • Deducting everything you’ve spent on your asset from the capital gain
  • Strategically exiting loss-makers to offset gains
  • Deferring losses to a year when your capital gains are expected to be higher
  • Holding on to your asset for more than 12 months before selling – this means you’ll only pay CGT on 50% of the gain
  • Salary sacrificing into your Super fund up to your pre-tax contributions limit