With the election looming, Labor have confirmed they intend to legislate halving the CGT Discount to 25% for investments entered into after 1 January 2020. (this would mean more tax being payable on gains made into the future.)
Currently the discount is at 50%, which means that a taxpayer (excluding company and superannuation funds) upon receipt of a capital gain arising from owning an investment asset for greater than 12 months would only be taxed on 50% of the gain.
Labor has announced that the plan will apply to all newly purchased assets after 1 January 2020 and held for more than a year.
All property and asset purchases made prior to this date will be fully grandfathered – this announcement at least removes any concern that existing assets would be caught.
The changes will not apply to Superannuation Funds nor will it apply to the 50% active asset reduction concession that applies to small business.
Implementation will depend upon the result of the May Election, and more particularly should Labor be elected to govern, the composition of the Senate.
Please contact Ian, Paul or James of HQB Accountants Auditors & Advisors if you would like to further discuss this matter.