Income Tax and Capital Gains Tax Calculated Separately?

Hey everyone. I recently made a capital gain of about $20k this financial year by buying and selling shares. I have a taxable income of about $6k. This is the first time I’ll need to pay tax here in Australia so I’m a bit confused about how much tax I’ll owe this year. I’ve tried out CGT calculators on various websites and they give me a capital gains tax of around $1500. I’m not sure if this includes the income tax or if that will be calculated separately to the CGT. Any help will be appreciated.

Comments

  • +2 votes
    1. Calculate your actual capital gain (proceeds - cost)
    2. Apply any concessions as may be available (50% discount method may be available if shares held 12+ months etc)
    3. That number is what goes into your tax return, taxed at your personal tax rate.

    So if you actual capital gain ends up being $20k, you would write $20K in a box on your return to be added up with everything else. It's the same tax treatment as receiving $20k of interest, or net rent income etc.

    •  

      So if my total income including capital gains turns out to be $26k then I’ll pay a single tax based on whatever tax slab my income fits into?

      • +1 vote

        Yes.

        •  

          Thanks. I got a bit confused as I haven’t paid tax here before.

          •  

            @immortanwayne: It might be worth doing some reading or speaking to an actual tax agent - "residents" have access to the 50% discount method, but non-residents do not, for instance:

            https://www.ato.gov.au/general/capital-gains-tax/internation...

            You will need to figure out which rules apply to you, etc.

            •  

              @CrowReally: Yeah I’ll probably talk to a tax agent. I didn’t hold my shares for more than 12 months so the discount doesn’t apply to me anyway.

            • -1 vote

              @CrowReally:

              It might be worth doing some reading or speaking to an actual tax agent

              You don't need to see a tax agent for a $20k capital gain. Given OP didn't hold it for over a year, it's just income.

  •  

    you'll also get a buy-sell summary from the stock broker in few months

  •  

    Say if u have assets like bitcoin but haven't reported to tax office for years what to do

  •  

    I recently made a capital gain of about $20k this financial year by buying and selling shares.

    Did you hold the shares for longer than a year? If so, then it is a capital gain, if not, then it is classified as income.

    If it is income, then the $20k will just be added to your taxable income. If it is capital gain, then it will be halved, then added to your taxable income (i.e. you get a 50% discount on your capital gains before tax).

    •  

      This is entirely incorrect. Shares bought and sold within a year are still capital gains. Shares are a capital asset.

      Trading incredibly frequently in a business like manner will turn you into running a business of share trading, and then shares will become your trading stock - that's the only circumstances in which a share sale would not be a capital gain.

  • +1 vote

    Check with a tax agent on whether you would be classified as a "temporary resident", if yes, you may eligible for temporary resident rules. The same treatment as a foreign resident (i.e. no CGT on certain assets).