Net Capital Gain/Loss and Fringe Benefits Taxation in Australia

Taxation Theory, Practice & Law
Student Name
[Pick the date]

Question 1
Net capital gain/loss have been estimated for the various transactions enacted by the taxpayer
(client) during the income tax year from the disposal of her assets.
‘Vacant Land Block’
Capital gain tax would be payable on behalf of the taxpayer for the capital gains/losses incurred
on the post-CGT assets as defined in s. 149 (10), ITAA 1997. All the assets which are purchased
after 20 September 1985 are counted as post-CGT assets and are liable for CGT. Land block was
purchased in 2001 and thus, CGT liability will be levied on taxpayer. The transaction done for
sale of land is A1 event under s. 104 -5 and the capital gains/losses would be estimated after
determining the various elements of cost base of asset (Barkoczy, 2017).
As per TR 94/29, the CGT would be payable in current year CGT irrespective of the fact that
taxpayer has signed the contract in current year but will get the payment in next year. Further,
the capital gains would be found after taking away the last year capital losses (Coleman, 2016).
1

Only 50% amount would be considered for capital gains as the holding period of land exceeds
one year as per s. 115-25(1).
‘Antique Bed’
Collectibles are capital assets and antique item fall in the category of collectibles as per TD
1999/40. Further, it is imperative to note that under s. 118-10(1), the income from disposal will
not raise CGT when the buying value of asset is $500 or lower than $500. Antique bed is a post
CGT asset as it has been acquired after 20 September 1985 and thus, CGT will be estimated for
the bed as buying value is higher than $500 (Reuters, 2017).
Only 50% amount would be considered for capital gains as the land is long term post-CGT asset
as per s. 115-25(1).
Painting
Capital gain tax would be payable on behalf of the taxpayer for the capital gains/losses incurred
on the post-CGT assets as defined in s. 149 (10), ITAA 1997. Painting was purchased on 2 May
2