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The difference between the actual price and the disposable price of an asset is stated as capital gains or losses. Capital Gains Tax (CGT) or tax on capital gains – the amount more than the actual value of the disposed asset – is a part of your income tax that you pay on the profit from the sale of any asset or any kind of investment.
On the contrary, if you have capital losses – the amount less than the actual value of the disposed asset – it is carried forward and is compensated from the future capital gains, as it cannot be compensated in contradiction of the income from other sources.
There are mainly three types of assets that fall in the CGT assets category. They are:

  • Collectables: This includes assets like: jewellery, rare coins, paintings, etc.
  • Assets for Personal use: This includes assets like: household items, furniture, etc.
  • Other Assets: This includes assets like: land, company shares, license, etc.

When does Tax Gains or Losses Occur?
The capital gain or loss occurs due to different types of CGT events, the most common ones are the following:

  • Selling or giving away of an asset;
  • Discontinuation of Australian citizenship;
  • Cancellation, surrender or redemption of shares;
  • Loss or destruction of an asset and the compensation received for it;
  • Distribution of capital to shareholders (but not as dividend to shareholder).


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