Selling business assets will generally require considering Capital Gains Tax implications. However even when selling personal non-business assets there may be a need to consider Capital Gains Tax.
A capital gains is generally the sales price of the items less the cost of the item. The resulting gain may then be decreased by application of a number of concessions to come to the Taxable Capital Gain.
Examples of common non-business transaction people are familiar with are sale of rental properties and shares which result in Capital Gains Tax. However items that many people disregard as being possibly applicable to taxable capital gains are sale of any real estate that are not your primary residence, such as a holiday houses, vacant land and even land around your family home where the land area is greater than 2 hectares (5 acres).
Also there may be the possible application of tax on the disposal of Personal Use assets such as boats, furniture, electrical goods, and household items. For these items to be applicable item would be required to have cost $10,000 or more. This can also apply to collectables where the item cost $500 or more such as art work, jewellery, antiques, coins, stamps etc. These situations generally only apply to situations where there has been a profit on sale.
Many people fail to declare such transactions, however more and more the ATO are able to track the sale of such items by sharing information with organisations such as the State Revenue Offices, Vehicle Registration Authorities etc. This way they are notified of all land transfers, share transactions and vehicle movements.
Next time you are doing your tax and the accountant asks have you disposed of any assets, don’t just think about your Shares and rental properties.
For more information on Capital Gains or the consequences of selling assets refer to your personal accountant or refer to the ATO website where there is a wealth of information regarding Capital Gains Tax.