Case Study on Taxation Law Australia 2022

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TAXATION LAW AUSTRALIA
CASE STUDY ON CAPITAL GAINS TAX AND CAPITAL
ALLOWANCE
STUDENT’S NAME:
ID:
MODULE:
INSTRUCTOR:

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Table of Contents
Introduction........................................................................................................... 2
Answer to the question no- 1.................................................................................2
Answer to question no- 2....................................................................................... 6
Conclusion............................................................................................................. 7
References............................................................................................................. 8

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Introduction
Answer to the question no- 1
This report reveals the key implication of the GST and capital gain tax rules and regulations.
It is analyzed that capital gain is the gains that can be achieved by selling assets, and such
gain acquires payable tax against as per the Australian taxation rules and regulations.
However, the loss can also be occurred due to the sale of assets which in turn supports the
assessed by providing financial back up to reduce the amount of CGT in the same calendar
year.
1. Capital Gains Tax Consequences on sale of Assets by Jasmine
●Capital Gains Tax (CGT)
.In Australia, CGT has been applied by the Australian Taxation Office since 20th September
'85 and generally covers a vast area of assets. Though some exemptions are there which do
not acquire CGT such as personal assets and solely used assets. The CGT becomes payable at
the time of disposal, not at the time when an assessee settles. In addition, the Australian
Taxation Office has implemented CGT by assessing separate heading, instead of integrated
with normal income and arrives at the taxable income which must be paid with the applied
tax rate. For an Australian resident, CGT is applied to his/her assets anywhere in the world
while for Norfolk Island residents, CGT has been applied since 23rd October 2015. There are
some subsidiary discounts for foreign residents in Australia by which they should pay tax for
the 'Taxable Australian Properties' only (Cassidy, and Cheng, 2017). When any asset has
occurred for 12 months at least, it can be enlisted as a long-term asset and a 50% discount can
be achieved by the assessee from the regulatory board. In order to maintain a smooth taxation
process, taxation system of Australia requires the total CGT to be reported in an annual
income tax return which increases the amount of payable tax for an assessed. When an
assessee makes a capital gain, it is added to the annual income which is assessable to pay tax
and thus the amount of tax is increased rapidly. Henceforth, to have a concept of annual tax,
one should calculate it at the early phase of the assessment year (Australian Taxation Office,
2019).
● Set-off and carry forward of loss
Another important note on the implementation of the Australian Taxation System is their Set
off & Carry forward rule which helps the assessee to adjust loss against gain that reduces the