Australian Taxation - Capital Gains Tax

These flashcards cover key vocabulary from the Australian taxation lecture focusing on Capital Gains Tax (CGT).

Capital Gains Tax (CGT)

A tax on the profit realized from the sale of a non-inventory asset.

CGT assets

Any kind of property or a legal or equitable right that is not property.

Net capital gain

The total capital gain remaining after capital losses and applicable exemptions have been subtracted.

Cost base

The total cost associated with an asset for calculating capital gains.

Reduced cost base (RCB)

The cost used to calculate a capital loss on a CGT asset.

CGT event A1

The disposal of a CGT asset, which results in a capital gain or loss.

Small Business Entity (SBE)

An entity that carries on a business with an annual turnover of less than $2 million.

Cryptocurrencies

Digital assets treated as property for CGT purposes in Australia.

Main residence exemption

An exemption that applies to capital gains or losses on a dwelling that qualifies as the taxpayer's main residence.

Collectables

Assets such as art or antiques that are acquired for $500 or more and have special CGT rules.

Depreciating asset exemption

A rule that generally disregards capital gains or losses related to depreciating assets.

Indexation method

A method to adjust the cost base of an asset for inflation when calculating capital gains.

Discount method

A method allowing individual taxpayers and certain entities a discount on capital gains if assets are held for more than 12 months.

Capital improvements

Structural changes to existing CGT assets that may be treated as separate CGT assets if certain conditions are met.

CGT exemptions

Exceptions that allow taxpayers to disregard capital gains or losses under specific circumstances.