Capital Gains Tax
Capital gains tax (CGT) is the tax you pay on a capital gain. It is not a separate tax, but part of your income tax.
The most usual way to make a capital gain or loss is to sell assets like real estate, shares or managed fund investments.
Capital gains tax came into effect on 20 September 1985. All assets you have acquired since this date are subject to the CGT rules including options, rights and business goodwill (unless specific exclusions apply).
If you are an individual, some assets may be exempt from CGT, including:
- Your main residence
- Your car, motorcycle or similar vehicle
- Assets for personal use that you acquired for $10,000 or less
There are other exemptions, rollovers, and concessions that may allow you to ignore, defer or reduce your capital gain or capital loss. In some situations using the indexation and discount methods to calculate your capital gain can also reduce this.
RESIDENTS AND NONRESIDENTS
If you are an Australian resident, CGT applies to your assets anywhere in the world.
For foreign residents, CGT applies to taxable Australian property.
MORE: See the Capital Gains Tax Essentials section of the ATO website.
Income Tax Planning
One of the most important areas of wealth maximisation is income tax planning. Proper tax planning can have a profound effect on cash flow management to best achieve client goals. We all have the ability to order our affairs in such a way as to pay the required amount of tax and no more. At Hamilton Hateley & Associates we consider ways to minimise or defer tax payments in the planning process. Typical Tax planning tools include:
- Appropriate business structures
- Involvement of family members
- Deferral of income
- Prepayment of expenses
- Farm management deposits
Hamilton Hateley & Associates will review prior year tax records both for analysing the clients current financial condition and potential for improved results. In some cases it becomes obvious that amendments should be submitted to the Australian Taxation Office.
Fringe benefits tax (FBT) is paid on particular benefits employers provide to their employees or their employees' associates instead of salary or wages. Benefits can be provided by an employer, an associate of an employer, or a third party by arrangement with an employer. An employee can be a former, current, or future employee.
FBT is separate from income tax and based on the taxable value of the various fringe benefits provided. The FBT year runs from 1 April - 31 March.
The following categories of fringe benefits apply, with specific valuation properties applicable to each category:
- Airline transport Board - Eg a meal
- Car - Eg letting employees use a work vehicle for a private purpose
- Car parking
- Debt waiver
- Entertainment - Eg food, drink, recreation
- Expense payment - Eg reimbursing an expense incurred by an employee such as school fees
- Living-away-from-home allowance
- Loan - Eg granting an employee a cheap loan
MORE: See the ATO website for more on FBT categories.
The following are NOT fringe benefits:
- Approved employee share acquisition schemes
- Employer contributions to complying superannuation funds
- Employment termination payments - Eg company car given or sold to employee when they leave
- Certain benefits provided by religious institutions to their religious practitioner
You can reduce the amount of FBT you pay by:
- Replacing fringe benefits with a cash salary
- Providing benefits that your employees would be entitled to claim as an income tax deduction if they had paid for the benefits themselves
- Providing benefits that are exempt from FBT
- Using employee contributions
MORE: Read more about FBT for small businesses on the ATO website.
The GST system is a complex and confusing one. Consequently Hamilton Hateley & Associates
ensures our team remains up to date with any changes, enabling us to offer you accurate advice.
Every transaction now has an associated GST issue. We are experienced in these issues and can offer expert advice on the GST implications for your business. The GST-related services we offer include, but are not limited to:
- Advice on registering for GST
- Filing and adjusting GST returns
- ATO audit assistance
At Hamilton Hateley & Associates
we offer a full range of taxation services. Our taxation consulting division is nationally recognised and we offer advice based on proven knowledge and experience. Our proactive approach ensures we deliver consistent service and build solid relationships that stand the test of time.
Taxation can be a major cost to your business. We will work with you to minimise your tax and help you achieve your key objectives. We provide a complete service of assistance and advice in each of these areas:
- Preparing activity statements and advice on tax payments
- GST/FBT obligations
- Advice on, and implementation of, tax effective trust structures for asset protection and tax minimisation
- Managing any ATO audits or disputes
- FBT Obligations
- Capital Gains Tax and Small Business Concessions