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5 Tax and Structures

Capital gains tax

Reduction of capital gains tax

As previously discussed, the assessable portion of capital gains on assets held for more than 12 months, may be reduced, by a discount factor. The discount that is applied will depend upon the entity that owns the asset:

  • Individuals and trusts (50% discount) – half of the capital gain is included in assessable income (for trusts this applies if the distribution is made to an individual) 
  • Super Funds (1/3 discount) - two thirds of the capital gain is included in assessable income
  • Companies (no discount) - all of the capital gain is included in assessable income

Please note: From 1 July 2020, Managed Investment Trusts (MITs) and Attribution MITs will no longer be able to apply the 50% capital gains discount at the trust level; ensuring that income is taxed in the hands of investors as if they had invested directly.

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