The methodology applied to assets in a business sale valuation – or a partial disposal of one – carries significant consequences for the tax position of parties involved. A ruling by the Full Federal Court, Kilgour v Commissioner of Taxation [2025] FCAFC 183, establishes important judicial guidance on the proper determination of “market value” within the capital gains tax framework.

Practitioners and business owners engaged in sale transactions, structural reorganizations, or succession planning would do well to absorb the Court’s reasoning: tax valuations carry little weight unless they faithfully reflect the commercial circumstances of the transaction rather than resting on abstract assumptions.

Business Sale Valuation: The Facts in Issue

The dispute arose from a 2016 transaction in which three family trusts sold their shares in Punters Paradise Pty Ltd—an online wagering business—to News Corp for approximately $31 million. Shareholding was distributed as follows:

• Pettett Trust: 60%
• Kilgour Family Trust: 20%
• Reuhl Family Trust: 20%

The business sale evaluation proceeded on arm’s length terms, subject to due diligence and included a working-capital adjustment on completion.

Each 20% minority holder sought access to the small business CGT concessions, requiring net assets to remain below a $6 million threshold. They argued that an interest of that size would naturally attract a material discount when assessed independently.

The Commissioner rejected this, contending that each 20% parcel formed part of a unified 100% transaction and should be valued at 20% of the $31 million consideration. The Court upheld this approach.

The Court’s Reasoning on Market Value

The Court reaffirmed the “willing buyer/willing seller” standard from Spencer v Commonwealth, anchoring it in the commercial realities before it. Two significant points emerge.

1. Foreseeable circumstances inform the valuation date

The statutory provisions require value to be assessed “just before” the contract is executed. The Court held that a valuer cannot disregard circumstances within contemplation at that point. As completion was a practical certainty, the negotiated consideration was the most reliable indicator of market value.

A purchaser’s willingness to pay a premium—whether for control, synergies, or strategic positioning—forms part of the valuation context and cannot be excluded.

2. Transactional terms prevail over theoretical discount adjustments

The taxpayers relied on conventional minority discount principles. The Court rejected this as commercially artificial, noting three features:

• The shareholders had agreed to divest simultaneously and as a unified whole.
• The purchaser sought complete ownership, making fragmented acquisitions irrelevant.
• A 100% sale inherently supports the full attributed value of each parcel, regardless of size.

A notional purchaser would have had no rational basis for applying a minority discount. Each interest derived its value from participation in the aggregate transaction. Coordinated disposals can result in interests being valued above what a disaggregated analysis produces.

Business Sale Valuation Considerations for Owners and Advisers

• Minority interests may carry greater value than assumed. Where a purchaser is motivated by control or synergistic benefits, the market value of a modest shareholding may exceed what a mechanical discount suggests. Advisers must ensure the full commercial context informs every business sale valuation exercise.

• Contemporaneous records are essential. Documentation gathered during the transaction—negotiation correspondence, independent valuations, and evidence of the purchaser’s rationale—will be central to substantiating a tax position where CGT concessions are in issue.

• CGT concession eligibility warrants early analysis. Owners intending to rely on small business concessions should review their position before binding steps are taken, including execution of heads of agreement. Structural adjustments may produce different outcomes, though anti-avoidance provisions must be assessed carefully.

• Shareholder expectations must be aligned. Minority holders in private or family enterprises often assume their interests will be assessed in isolation. Kilgour confirms courts examine the transaction as a whole, and collective conduct among co-owners shapes how interests are valued.

Concluding Observations

Kilgour reinforces a foundational principle: a business sale valuation disconnected from genuine commercial conditions is unlikely to withstand scrutiny. Business owners and advisers should engage well before contractual commitments are made, ensuring business sale valuations are properly constructed and documented. Where CGT concessions are at stake, the difference between a defensible and an ill-considered valuation may prove both substantial and irreversible.

Need Help?

By working with us as your professional tax accountant and mortgage broker, you can be confident that your loans are structured to protect your tax position, maximise deductions, and avoid costly mistakes, giving you greater peace of mind and more control over your financial future.

Pitt Martin Group is a firm of Chartered Accountants, providing services including taxation, accounting, business consulting, self-managed superannuation funds, auditing and mortgage & finance. We spend hundreds of hours each year on training and researching new tax laws to ensure our clients can maximize legitimate tax benefit. Our contact information are phone +61292213345 or email info@pittmartingroup.com.au. Pitt Martin Group is located in the convenient transportation hub of Sydney’s central business district. Our honours include the 2018 CPA NSW President’s Award for Excellence, the 2020 Australian Small Business Champion Award Finalist, the 2021 Australia’s well-known media ‘Accountants Daily’ the Accounting Firm of the Year Award Finalist and the 2022 Start-up Firm of the Year Award Finalist, and the 2023 Hong Kong-Australia Business Association Business Award Finalist.

Pitt Martin Group qualifications include over fifteen years of professional experience in accounting industry, membership certification of the Chartered Accountants Australia and New Zealand (CA ANZ), membership certification of the Australian Society of Certified Practising Accountants (CPA), Registered Australia Tax Agents, certified External Examiner of the Law Societies of New South Wales, Victoria, and Western Australia Law Trust Accounts, membership certification of the Finance Brokers Association of Australia Limited (FBAA), Registered Agents of the Australian Securities and Investments Commission (ASIC), certified Advisor of accounting software such as XERO, QUICKBOOKS, MYOB, etc.

This content is for reference only and does not constitute advice on any individual or group’s specific situation. Any individual or group should take action only after consulting with professionals. Due to the timeliness of tax laws, we have endeavoured to provide timely and accurate information at the time of publication, but cannot guarantee that the content stated will remain applicable in the future. Please indicate the source when forwarding this content.

We take insight here of the mainly tax related changes in the Federal Budget 2025-26 announced on Tuesday this week, in relates to the topics of Individual & Families, Business & Employers, Government & regulators, & The Economy.

Individuals & Families

Modest Personal Income Tax Cuts

Effective Date: 1 July 2026

The government has announced a phased reduction in personal income tax rates. Taxpayers will see a decrease in rates starting from 1 July 2026, with another reduction from 1 July 2027.

• The tax rate for earnings between $18,201 and $45,000 will drop from 16% to 15% in 2026 and further decrease to 14% in 2027.
• The estimated cost of these reductions is $648 million over four years.
• Maximum annual savings per taxpayer:
  • $268 in 2026-27
  • $536 in 2027-28

Revised Personal Income Tax Brackets

Income Brackets ($)	Rates in 2024–25 & 2025–26 (%)	Rates in 2026–27 (%)	Rates in 2027–28 (%)
0 – 18,200	Tax-free	Tax-free	Tax-free
18,201 – 45,000	16	15	14
45,001 – 135,000	30	30	30
135,001 – 190,000	37	37	37
>190,000	45	45	45

Increased Medicare Levy Thresholds for Low-Income Earners

Effective Date: 1 July 2024
The government has raised the income threshold for exemption from the Medicare levy, reducing costs for low-income earners.

Category	2024-25 Threshold ($)	2025-26 Threshold ($)
Singles	26,000	27,222
Families	43,846	45,907
Single Seniors & Pensioners	41,089	43,020
Family Seniors & Pensioners	57,198	59,886
Additional Child/Student	4,216	4,027

This measure is estimated to cost $648 million over five years.

$150 Energy Bill Relief

Effective Date: 1 July 2025
Eligible households and small businesses will receive a $150 automatic credit on their energy bills, disbursed in quarterly instalments between 1 July and 31 December 2025.

• Estimated cost: $1.8 billion over two years.

Changes to Foreign Resident Capital Gains Tax (CGT)

Effective Date: Delayed to 1 October 2025 (earliest)
Proposed amendments to foreign resident CGT rules, initially scheduled for 1 July 2025, have been delayed. These amendments will expand the assets subject to CGT for foreign residents and require them to report high-value transactions with a value of at least $20 million to the ATO before completion.

Temporary Ban on Foreign Ownership of Established Homes

Effective Date: 1 April 2025
A two-year ban will prevent foreign and temporary residents, along with foreign-owned companies, from purchasing established residential properties in an effort to combat ‘land banking.’

Changes to Managed Investment Trust (MIT) Taxation

Effective Date: Post-Royal Assent
The extension of the cleaning building Managed Investment Trust (MIT) withholding tax concession, initially scheduled for 1 July 2025, has been postponed. It will now commence on the first 1 January, 1 April, 1 July, or 1 October after the Act receives Royal Assent.

Additionally, the government will amend tax laws to clarify MIT arrangements, ensuring that legitimate investors continue to benefit from concessional withholding tax rates. These changes will apply to fund payments made from 13 March 2025 and align with the ATO’s increased scrutiny in this area to prevent potential misuse

‘Help to Buy’ Program Expansion

The government has expanded the ‘Help to Buy’ program, which reduces the upfront cost of purchasing a home by providing an equity contribution through Housing Australia. Under the program:

• Eligible participants can receive up to 30% of the purchase price for an existing home.
• For new homes, the Commonwealth equity contribution increases to 40%.
• The income eligibility thresholds have increased from $90,000 to $100,000 for singles and from $120,000 to $160,000 for joint applicants.
• Additional conditions apply, and the program remains unavailable for new applications at this time.

Business & Employers

Ban on Non-Compete Clauses for Workers

Effective Date: 2027
The government will prohibit non-compete clauses for employees earning below the high-income threshold ($175,000). Additional measures will:

• Prevent businesses from fixing wages through anti-competitive agreements.
• Ban ‘no-poach’ agreements restricting employee mobility.

Paused Beer Tax and Benefits for Alcohol Producers

Effective Date: August 2025 (beer excise) & 1 July 2026 (other measures)

• The indexation of draught beer excise duty will be paused for two years starting August 2025.
• The excise remission cap for brewers, distillers, and wine producers will rise to $400,000 annually from 1 July 2026 (up from $350,000).

Extension of Trade Tariffs on Russia & Belarus

The government has prolonged an additional 35% tariff on imports from Russia and Belarus as part of ongoing support for Ukraine.

Government & Regulators

$999M Boost to ATO Tax Compliance Efforts

Effective Date: 1 July 2025
Funding of nearly $1 billion over four years will expand key tax compliance programs, expected to recover $3.2 billion in revenue. Programs include:

• Tax Avoidance Taskforce
• Shadow Economy Compliance Program
• Personal Income Tax Compliance Program
• Tax Integrity Program (targeting medium and large businesses, as well as wealthy groups)

$700M Cut in Government Outsourcing

The government aims to reduce reliance on external contractors, estimating savings of $718 million by 2028-29.

The Economy

Growth

Australia’s economy is projected to grow at a modest pace, with GDP expected to expand by 2.25% in 2025-26 and 2.5% in 2026-27. The direct economic impact of Ex-Tropical Cyclone Alfred is estimated to reduce GDP by up to 0.25%.

Budget Deficit

The underlying cash balance is forecasted to be a deficit of -$42.1 billion in 2025-26, with gradual improvements over subsequent years, though remaining in deficit.

Government Debt

Debt is projected to increase from 18.4% of GDP in 2023-24 to 21.5% in 2025-26, reaching 23.1% by 2028-29.

Employment

The unemployment rate remains low, with strong workforce participation. Since May 2022, employment has increased by over one million people, with around 80% of new jobs created in the private sector. Unemployment is expected to peak at 4.25%.

Wages

Annual real wages have grown for five consecutive quarters and are projected to rise by 0.5% in 2024-25. The Wage Price Index (WPI) grew by 3.2% through the year to the December quarter 2024 and is forecast to grow by 3% to June 2025 and 3.25% to June 2026.

Inflation

Inflation is expected to be 2.5% through the year to the June quarter 2025. The decline in inflation has been supported by cost-of-living relief measures, a reduction in petrol prices towards the end of 2024, and rebates on electricity and rental assistance. These factors collectively reduced headline inflation by 0.75% through the year to December 2024.

Global Economic Tensions

Trade tensions continue to contribute to global uncertainty. The indirect impact of tariffs is estimated to be nearly four times greater than the direct effect on Australia, reflecting significant trade relationships with China and the United States. Any retaliatory tariffs would further amplify potential losses in real GDP.

Pitt Martin Group is a CPA accounting firm, providing services including taxation, accounting, business consulting, self-managed superannuation funds, auditing and mortgage & finance. We spend hundreds of hours each year on training and researching new tax laws to ensure our clients can maximize legitimate tax benefit. Our contact information are phone +61292213345 or email info@pittmartingroup.com.au. Pitt Martin Group is located in the convenient transportation hub of Sydney’s central business district. Our honours include the 2018 CPA NSW President’s Award for Excellence, the 2020 Australian Small Business Champion Award Finalist, the 2021 Australia’s well-known media ‘Accountants Daily’ the Accounting Firm of the Year Award Finalist and the 2022 Start-up Firm of the Year Award Finalist, and the 2023 Hong Kong-Australia Business Association Business Award Finalist.

Pitt Martin Group qualifications include over fifteen years of professional experience in accounting industry, membership certification of the Australian Society of Certified Practising Accountants (CPA), Australian Taxation Registered Agents, certified External Examiner of the Law Societies of New South Wales, Victoria, and Western Australia Law Trust Accounts, membership certification of the Finance Brokers Association of Australia Limited (FBAA), Registered Agents of the Australian Securities and Investments Commission (ASIC), certified Advisor of accounting software such as XERO, QUICKBOOKS, MYOB, etc.

This content is for reference only and does not constitute advice on any individual or group’s specific situation. Any individual or group should take action only after consulting with professionals. Due to the timeliness of tax laws, we have endeavoured to provide timely and accurate information at the time of publication, but cannot guarantee that the content stated will remain applicable in the future. Please indicate the source when forwarding this content.

By Angela Abejo @ Pitt Martin Tax

The main residence exemption typically shields your family home from capital gains tax (CGT) upon its sale. However, as with many tax matters, it’s not straightforward. Below, we delve into the key aspects of the Main Residence Exemption to provide a comprehensive guide.

Qualifying as Your Main Residence

A home is usually deemed your main residence if:

• You and your family live in the house.
• Your personal belongings are in the house.
• You receive mail at this address.
• You register this address on the electoral roll.
• Utility services like telephone, gas, and electricity are connected in your name.
• You intend for it to be your main residence.

Interestingly, there is no specific time requirement for how long you must live in the home. The intention of making it your main residence is the key factor.

Application of the Main Residence Exemption

Generally, CGT applies to home sales unless you qualify for an exemption, partial exemption, or can offset the tax with a capital loss. If you’re an Australian tax resident, you can claim the full main residence exemption if:

• The home was your primary residence for the entire ownership period.
• You didn’t use the home to generate income.
• The land area is 2 hectares or less.

Partial Exemption

If your home was used to produce income, you may qualify for a partial exemption. This often arises in cases where you:

• Run a business from home (working from home is acceptable).
• Rent out the home or a part of it.

Since July 2023, platforms like Airbnb must report transactions to the ATO, which will match this data against reported income.

Foreign Residents and Changing Residency

Foreign residents cannot access the main residence exemption, even if they were residents for part of the ownership period. If you’re a non-resident when you sell the property, the exemption likely won’t apply. Conversely, if you’re a resident at the time of sale and meet other criteria, you could qualify for the exemption even if you were a non-resident for part of the ownership period.

The Absence Rule

The absence rule allows your home to remain your main residence for tax purposes even if you are not living there, under certain conditions:

• Rented Out: The home can be rented out for up to six years and still qualify as your main residence.
• Not Producing Income: If the home is not rented out and not producing income, it can remain your main residence indefinitely.

It’s crucial to note that applying the absence rule to one property prevents you from claiming the main residence exemption on another property during the same period.

Timing

Your home generally qualifies as your main residence from the time you move in. If you move in as soon as practicable after the settlement date, it’s considered your main residence from the acquisition date.

If you buy a new home but haven’t sold your old one, you can treat both properties as your main residence for up to six months without affecting your main residence exemption eligibility. This applies if your old home was your main residence for at least three continuous months within the 12 months before you sold it and was not used to produce income during any part of that time when it was not your main residence. If selling the old home takes more than six months, the main residence exemption may apply to both homes only for the last six months before selling the old home. Before this period, you may choose which home is your main residence, with the other becoming subject to CGT.

If your new home is rented when purchased and you cannot move in, it is not your main residence until you do. Unforeseen circumstances, like hospitalization or an overseas work posting, might allow the main residence exemption if you move in as soon as practicable after resolving the issue. Inconvenience is not a valid reason, and documentation is required.

Couples and Main Residences

For couples, the rules are slightly different. Couples cannot claim the full CGT exemption on two separate homes. You have two options:

• Single Main Residence: Choose one home as the main residence for both.
• Split Exemption: Nominate different homes as main residences, splitting the exemption between you.

If you choose different homes:

• Owning 50% or less means the home is your main residence, qualifying you for the exemption.
• Owning more than 50% means the home is your main residence for half the period.

Divorce and the Main Residence

Assuming the home is transferred between spouses (not involving a trust or company), both individuals used the home solely as their main residence during their ownership period, and all other eligibility conditions are met, a full main residence exemption should be available when the property is eventually sold.

If the home qualified for the main residence exemption for only part of the ownership period for either individual, a partial exemption might be available. In this case, the spouse receiving the property may need to pay CGT on the gain from their share of the property received as part of the settlement when they eventually sell it.

Conclusion

While the Main Residence Exemption offers substantial benefits, the rules can be complex and vary based on individual circumstances. Factors such as changes in residency status, periods of absence, and property use can all impact your eligibility. Therefore, seeking professional advice is highly recommended to navigate these rules effectively and ensure you are maximising your tax benefits.

Pitt Martin Group is a CPA accounting firm, providing services including taxation, accounting, business consulting, self-managed superannuation funds, auditing and mortgage & finance. We spend hundreds of hours each year on training and researching new tax laws to ensure our clients can maximize legitimate tax benefit. Our contact information are phone +61292213345 or email info@pittmartingroup.com.au. Pitt Martin Group is located in the convenient transportation hub of Sydney’s central business district. Our honours include the 2018 CPA NSW President’s Award for Excellence, the 2020 Australian Small Business Champion Award Finalist, the 2021 Australia’s well-known media ‘Accountants Daily’ the Accounting Firm of the Year Award Finalist and the 2022 Start-up Firm of the Year Award Finalist, and the 2023 Hong Kong-Australia Business Association Business Award Finalist.

Pitt Martin Group qualifications include over fifteen years of professional experience in accounting industry, membership certification of the Australian Society of Certified Practising Accountants (CPA), Australian Taxation Registered Agents, certified External Examiner of the Law Societies of New South Wales, Victoria, and Western Australia Law Trust Accounts, membership certification of the Finance Brokers Association of Australia Limited (FBAA), Registered Agents of the Australian Securities and Investments Commission (ASIC), certified Advisor of accounting software such as XERO, QUICKBOOKS, MYOB, etc.

This content is for reference only and does not constitute advice on any individual or group’s specific situation. Any individual or group should take action only after consulting with professionals. Due to the timeliness of tax laws, we have endeavoured to provide timely and accurate information at the time of publication, but cannot guarantee that the content stated will remain applicable in the future. Please indicate the source when forwarding this content.

By Zoe Ma @ Pitt Martin Tax

The Australian Tax Office (ATO) is aware of an increasing number of Australians buying and selling cryptocurrency over the past few years, the most popular types are Bitcon (BTC), Ethereum (ETH), Tether (USDT), etc. However, not every one of them are aware of their tax obligations. It is essential for investors and traders to understand the tax implications associated with these digital assets. ATO has provided comprehensive guidelines on how crypto assets are treated for tax purposes. To help you along the way, this article will outline the implication of tax on crypto assets in two aspects, which is Capital Gains Tax (CGT) for crypto investors and income tax for crypto traders.

Investor or Trader?

It is important to identify whether you are a crypto investor or crypto trader to determine whether your activities will be taxed under CGT rules or income tax rules. The most common use of cryptocurrency is as an investment, individuals who buy and sell crypto assets to make a profit would be considered as a crypto investor, any gains made from the disposal of crypto assets will be subject to CGT. On the other hand, for individuals who actively engage in trading cryptocurrency in an organised, business-like manner, would be considered as a crypto trader who carry on a crypto trading business. The trading income from the activities would be treated as business income.

Crypto Assets Investors

For individuals who hold crypto assets as investments, CGT becomes a crucial aspect to consider when selling, trading, or disposing of these assets. According to the ATO, cryptocurrencies are considered to be a form of property for tax purposes. This means that any gains made from the sale or disposal of crypto assets may be subject to CGT.

CGT Event:

A CGT event happens when you sell, gift, trade, exchange or swap crypto assets, even when you convert a crypto asset into Australian or foreign currency or buy goods or services with it. By simply buying or holding a crypto asset, you would not need to calculate any capital gains or losses. You are only required to calculate it when a CGT event happens.

Determining Capital Gain or Loss:

To calculate CGT, the ATO requires investors to determine the cost base of their crypto assets, which includes the original purchase price, transaction fees, and any incidental costs. When a crypto asset is sold or disposed of, the capital gain or loss is calculated by subtracting the cost base from the sale proceeds. If the resulting value is positive, a capital gain has been made, and if negative, a capital loss has been incurred. Any capital loss can be used to deduct against capital gains you made.

Holding Period and CGT Discount:

The duration for which a crypto asset is held can impact the amount of CGT payable. If an investor holds their crypto assets for longer than 12 months before selling or disposing of them, they may be eligible for the CGT discount. This discount allows you to reduce the capital gains by 50%, effectively lowering the overall tax liability.

Record-Keeping:

It is essential to maintain accurate records of all cryptocurrency transactions, including purchase and sale dates, amounts, and values. This documentation is crucial when calculating capital gains and losses for tax reporting purposes.

Crypto Assets Traders

For individuals who actively engage in cryptocurrency trading as a business, the ATO views the trading income as assessable income for tax purposes.

Reporting Trading Income:

As a trader, you are required to report your trading activities and include the profits as part of your taxable income. This includes gains from selling cryptocurrencies, profits from mining activities, and any other trading-related income. Ensure that you accurately track your trading income and report it in the appropriate section of your tax return.

Deductible Expenses:

As a trader, you are entitled to claim deductions for expenses directly related to your trading activities. These may include transaction fees, exchange fees, trading software subscriptions, and other expenses incurred in the process. You would need to keep receipts for everything related to your operating expense to substantiate any claims made.

Business Structures:

Depending on the scale and complexity of your trading activities, you may consider operating as a sole trader or setting up a business structure such as a company or trust. Each structure has its own tax implications, and it is advisable to seek professional advice to determine the most suitable option for your circumstances.

Conclusion

As the cryptocurrency market continues to expand, understanding the tax implications associated with crypto assets becomes increasingly important. Whether you are an investor or a trader, it is essential to comprehend how taxes apply to your specific situation. By adhering to the ATO guidelines, maintaining accurate records, and seeking professional advice, you can ensure compliance with tax obligations and minimise any potential risks or penalties from ATO.

Our team have enormous experience in the crypto compliance work and tax advice. By using professional crypto capital gain/profit calculation platform, we can assure you that your new year tax return could save ample accountant fees this time. Please feel free to contact our friendly team in Pitt Martin Tax at 0292213345 our info@pittmartingroup.com.au.

The material and contents provided in this publication are informative in nature only.  It is not intended to be advice and you should not act specifically on the basis of this information alone.  If expert assistance is required, professional advice should be obtained.

By Zoe Ma @ Pitt Martin Tax

Not to be overly skeptical, but we are just curious about the ability of this latest AI software – ChatGPT – in dealing with the Australian tax system, so we conducted a simple test.

Firstly, it is worth noting that what impressed us most in the test was ChatGPT’s tone and approach, rather than its ability to handle the complexity of the tax question. The results of our test, including the example below, indicate that you may get some fairly accurate summary comments, but you cannot rely on a definitive answer. As most technical comments are formed into databases based on personal recommendations, rather than comments that can be explored on the internet, it is difficult for us to obtain reliable answers in a short time.

Here are the results of our test questions and comments (ChatGPT’s responses are presented in italics).

Question: How much capital gains tax do Australian residents pay on investment properties, with an example?

ChatGPT: Australian residents pay capital gains tax (CGT) on the profits earned from the sale of investment properties. The calculation of CGT is the sale price minus the cost of the property (purchase price plus any expenses related to acquiring and owning the property). For example, if an Australian resident purchased an investment property for $500,000 and spent $50,000 on expenses related to purchasing and owning the property (such as legal fees, stamp duty, and repair costs), the total cost of the property would be $550,000.

Accountant: Let’s take a moment to review. When calculating the asset cost base, there are some techniques and pitfalls to consider. Although in some cases, repair costs can be part of the property cost base, it is not always the case. If the asset sold is an investment property rented to tenants, the situation is usually different. When the landlord repairs damage that occurred during the rental period, this can usually be deducted in the financial year when the landlord incurs the repair costs. Since these repair costs are deductible, they should not be included in the property’s cost base.

Similarly, other adjustments need to be considered. In the context of investment properties, it is usually necessary to adjust the cost base to account for capital works deductions. When an investment property is used to earn rental income, the landlord can usually claim capital works deductions. So when calculating the cost base, we should subtract the capital works deductions that the landlord has already claimed or can claim (although there are some exceptions, such as the property acquired before May 13, 1997, and the improvement costs incurred before June 30, 1999).

The longer an investment property is held, the more significant the impact of capital works deductions and repair costs will become, and the more substantial the impact on capital gains calculations.

ChatGPT: Several years later, the resident decided to sell the property for AUD 700,000. The profit from the sale is AUD 700,000 – AUD 550,000 = AUD 150,000. The current CGT tax rate in Australia is 45%, and the resident will pay 45% of the profit of AUD 150,000, which is AUD 67,500.

Accountant: Hang on, let’s take a closer look about this. In Australia, there is no specific CGT tax rate of 45% that applies to capital gains. Net capital gains are part of an individual’s taxable income subject to income tax. We just need to add the net capital gains to calculate the individual’s corresponding taxable income for the year. If the taxable income figure is positive, then we apply the individual’s marginal tax rate. As a result, higher taxable income generally leads to higher marginal tax rates and higher tax amounts. Meaning, the tax rate applicable to an individual’s net capital gains will be affected by the individual’s other income or losses (if any).

In addition, although the highest marginal tax rate for individuals is currently 45%, Australian residents with taxable income over AUD 180,000 per year usually also have to pay a 2% Medicare levy. This should also be considered and included in the calculation.

ChatGPT: It should be noted that there are some exemptions and reliefs for CGT calculation, such as the main residence exemption and small business CGT concessions.

Accountant: If only taxation were that simple! For capital gains, some exemptions and reliefs can be applied. Although the answer mentioned the main residence exemption and small business CGT concessions, these concessions usually do not apply to the sale of investment properties.

To qualify for the main residence exemption (or partial main residence exemption), a key requirement is that the property needs to be constructed and used as the individual’s main residence. If the property is only used as an investment property to generate taxable rental income, the exemption usually does not apply, but if the property is inherited, the situation may be different.

In addition, small business CGT concessions usually do not apply to the sale of investment properties. This is because the concessions only apply to assets that pass the active asset test, which requires the property to be used in a qualifying business activity for a minimum period of time.

For properties used by the property owner or certain related parties in a business activity, they can be considered as active assets eligible for the concessions, but this is not the case for properties primarily used to generate rental income from unrelated parties.

If the property is only used to generate rental income from unrelated parties (i.e., used in a leasing business), the property is likely to fail the active asset test, and the small business CGT concessions should not apply.

Interestingly, the answer did not mention the general CGT discount or indexation, which is actually the most likely relief to apply in this situation.

If the vendor was an Australian resident for tax purpose (not a temporary resident) during the period of owning the property and has owned the property for more than 12 months, the 50% CGT general discount is usually available to reduce the capital gain.

If the property was acquired before 21 September 1999, cost base indexation may be available. Both methods need to be compared to determine which would provide the most favorable tax result.

ChatGPT: It’s always best to consult a tax professional for specific advice on your individual circumstances.

Accountant: Yes, that’s right. Thank you, ChatGPT.

Should you please have any question in regards to above, please feel free to contact our friendly team in Pitt Martin Tax at 0292213345 our info@pittmartingroup.com.au.

The material and contents provided in this publication are informative in nature only.  It is not intended to be advice and you should not act specifically on the basis of this information alone.  If expert assistance is required, professional advice should be obtained.

并不是因为过于多疑，我们只是好奇这个最新的人工智能软件——ChatGPT，在处理澳大利亚税务系统方面的能力如何，所以我们做了一个简单的测试。

首先，要说测试中令我们印象深刻的是ChatGPT的语气和方法，而不是对它处理税务系统复杂性的能力。我们进行的测试结果，包括下面的例子，表明你可能会得到一些相当准确的概括性评论，但是你不可能得到可以依赖的答案。由于大部分技术评论都是由个人建议形成数据库，而不是在网络上可以探索的评论，所以我们很难在短时间内得到可靠的答案。

以下是我们测试问题和评论的结果（ChatGPT的回答以斜体字呈现）。

问题：澳大利亚居民在投资物业上支付多少资本利得税，并附带一个算例。

ChatGPT：澳大利亚居民根据出售投资物业所获利润支付资本利得税（CGT）。 CGT的计算是从出售价格中减去物业的成本（购买价格加上与获取和拥有物业相关的任何费用）。

例如，假设一个澳大利亚居民以50万澳元购买了一处投资物业，并花费了5万澳元购买和拥有物业相关的费用（如法律费用、印花税和维修费用），则物业的总成本为55万澳元。

会计师：让我们在此停下来梳理一下。在计算资产成本基数时需要考虑一些技巧和陷阱。

尽管在某些情况下维修费用可以成为物业成本基数的一部分，但并非总是如此。如果出售的资产是出租给租户的投资物业，情况通常是不同的。当房东修理在物业出租给租户期间发生的损坏时，这通常可以在房东发生修理费用那个财年进行抵扣。因为这些维修费用可以获得扣除，所以不应该将其包括在物业的成本基数中。

同样，还需要考虑其他的调整。在投资物业的背景下，通常需要对成本基数进行调整，以考虑到资本工程抵减。当投资物业用于获得应纳租金收入时，房东通常可以申报资本工程抵减。那么，在计算成本基数时，我们应减去房东已经或可以申报的资本工程抵减（尽管存在一些例外情况，例如房产在1997年5月13日之前获得，且改善成本在1999年6月30日之前发生）。

越长时间持有投资物业则越容易使得资本工程抵减和维修成本变得相当显著，并对资本增值计算产生实质性影响。

ChatGPT: 经过数年后，居民决定以70万澳元的价格出售该房产。卖出所得利润为70万澳元-55万澳元=15万澳元。澳大利亚的CGT税率目前为45％，居民将支付15万澳元利润的45％，即67,500澳元。

会计师：让我们仔细看一下这个计算。在澳大利亚其实并没有一个特定适用于资本增值的45％的CGT税率。净资本增值是个体纳税人应纳入的可征收所得税的一部分。我们只是要加上净资本增值用于计算相应所得年度个人的应纳税收入。如果应纳税收入数字是正的，那么我们就适用于个人的边际税率。这样的结果是，较高的应纳税收入通常会导致较高的边际税率和较高的税额。换句话说，适用于个人净资本增值的税率会受到个人其他收入或损失（如果有的话）的影响。

此外，虽然个人最高边际税率目前为45％，但是适用于收入超过18万澳元的每个应纳税收入的澳大利亚居民通常还要缴纳2％的医保税。这也应该被考虑和纳入计算中。

ChatGPT: 值得注意的是，对于CGT计算，有某些豁免和减免，例如主要住所豁免和小企业CGT优惠。

会计师：如果税收仅仅那么简单就好了！对于资本增值，可以应用某些豁免和减免。尽管答案提到了主要住所豁免和小企业CGT优惠，但这些优惠通常不适用于投资房产的出售。

如果要享受主要住所豁免（或部分主要住所豁免），一个关键条件是房产需要被建造好并用作个人的主要住所。如果房产仅用作投资物业以获得应纳税租金收入，那么豁免通常不会适用，但如果房产是继承而来，则情况可能不同。

此外，小企业资本利得税减免通常不适用于投资物业的出售。这是因为减免只适用于通过活动资产测试的资产，这要求房产在符合条件的生意业务活动中使用的时间至少要达到最低标准。

对于那些被房主或某些关联方用于生意业务的物业，可以被视为符合减免的活动资产，但是对于主要用于从无联关方获得租金的物业，就是例外了。

如果该物业仅用于从无关联方获得租金（即使用于租赁业务），则该物业很可能无法通过活动资产测试，小企业资本利得税减免也就不应适用。

有趣的是，答案没有提到一般的资本利得税折扣或指数化，其实这是最可能适用于这种情况的减免。

如果卖方是在拥有该物业期间是澳大利亚居民（而不是临时居民），并且已经拥有该物业超过12个月，则50％的资本利得税一般折扣通常可用于减少资本增益。

如果房产在1999年9月21日之前购得，则可能可以使用成本指数调整。需要比较两种计算方法，以确定哪种会提供更有利的税务结果。

ChatGPT：建议咨询税务专业人士，以确定出售投资物业的具体税务影响。

会计师：是的，确实是这样。谢谢ChatGPT。

皮特马丁会计师事务所 Pitt Martin Group 是一家提供税务，会计，生意咨询, 自管养老金及审计等综合性服务的经澳洲会计师公会认证的注册会计师事务所。我们每年会花上几百个小时去研究新的税法，以保证我们的客户可以最大化合理避税。我们的中文联系方式是 Robert Liu +61292213345 或邮件 robert@pittmartingroup.com.au。皮特马丁会计师事务所Pitt Martin Group坐落在交通便利的悉尼市市中心，是一家拥有可以说中文合伙人的会计师事务所。我们的荣誉包括2018年CPA新州首席优秀奖，2019年澳洲知名媒体《每日会计师》年度最佳会计师奖，2020年澳洲知名媒体《每日会计师》年度最佳咨询师奖及澳大利亚小生意年度冠军入围奖, 2022年澳洲知名媒体《每日会计师》年度最佳新人入围奖。

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