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Is capital gains included in my annual personal tax?

Newbie

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Replies 5

For example, Person A purchases share worth $500 (+10 brokerage fee) on 01 January 2020.

He then sells those shares at $700 (+10 brokerage fee) on 15 June 2020. His annual income apart from this equals $1,000. 

Since he purchased and sold the shares within 12 months and his annual income being below the tax threshold, how much tax will Person A be liable to pay? 

Is the CGT calculated separately at the rate of 30% on the gains of $200?

1 ACCEPTED SOLUTION

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Most helpful response

Devotee

Replies 4

You pay tax on all your income, including capital gains, at your marginal tax rate. Therefore, if you are below the tax free threshold your marginal tax rate is 0. 

5 REPLIES 5

Most helpful response

Devotee

Replies 4

You pay tax on all your income, including capital gains, at your marginal tax rate. Therefore, if you are below the tax free threshold your marginal tax rate is 0. 

Newbie

Replies 3

So this applies even if you sold stocks within 12 months. Like when does the 30% CGT rate apply?

Devotee

Replies 2

Buy and sell within twelve months impacts on the calculation of the capital gain (i.e. no discount), it does not determine the rate of tax.  Individual taxpayers pay tax on capital gains at the marginal rate. Whereas companies pay either 30%, or 27.5%, on their capital gains depending on their turnover threshold. 

Newbie

Replies 1

So how do we calculate our marginal tax rate? 

Thanks for your help Smiley Happy

Devotee

Replies 0

The marginal rates are set by Government. The marginal rates are as follows:

 

Resident tax rates 2020–21

$18,201 – $37,00019c for each $1 over $18,200
$37,001 – $90,000$3,572 plus 32.5c for each $1 over $37,000
$90,001 – $180,000$20,797 plus 37c for each $1 over $90,000
$180,001 and over$54,097 plus 45c for each $1 over $180,000