Capital gains tax
A capital gains tax (abbreviated: CGT) is a tax charged on capital gains, the profit realized on the sale of a non-inventory asset that was purchased at a lower price. The most common capital gains are realized from the sale of stocks, bonds, precious metals and property. Not all countries implement a capital gains tax and most have different rates of taxation for individuals and corporations. For equities, an example of a popular and liquid asset, each national or state legislation, have a large array of fiscal obligations that must be respected regarding capital gains. Taxes are charged by the state over the transactions, dividends and capital gains on the stock market. However, these fiscal obligations may vary from jurisdiction to jurisdiction because, among other reasons, it could be assumed that taxation is already incorporated into the stock price through the different taxes companies pay to the state, or that tax free stock market operations are useful to boost economic growth.
The capital gain available on a taxi licence has historically been one of its most attractive features as an investment, but since 1985 the introduction of Capital Gains Tax has introduced challenges for many investors. There are a range of concessions on Capital Gains Tax available to the owners of an active asset (a business). Using the Active Asset concession on top of the normal discount to an individual or trust can see the taxable amount reduced by 75%. The tax on this capital gain can be further deferred or eliminated entirely depending on the circumstances of the owner (eg rollover into super fund).
