Australia Capital Gains Tax Calculator

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The Capital Gains Tax Calculator by iCalculator is the most comprehensive online calculator for capital gains tax calculations in Australia for both individuals and corporations including small business. The calculator allows for quick calculations of Capitals Gains tax which simply requires the asset amount and associated expenses occurred directly as part of acquiring and maintaining the asset.

Alternatively, you can use the more detailed capital gains tax calculator elements and enter specific additions, deductions and the duration for which the asset was held, this allows for calculation of capital gains using the ATO "Indexation Method", "Discount Method" and "Other Method". The Detailed Capital Gains Calculation is effectively an online version of the ATO "Capital Gain or Capital Loss Worksheet".

The calculator can also be used to calculate Capital Loss via the "Detailed Capital Gains Tax Calculation" section. There is relevant advice and information on capital gains below the calculator included detailed user guides and formula for manually calculating capital gains tax in Australia.

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Understanding Capital Gains in Australia

In the following article, which is provided in support of the Capital Gains Tax Calculator, we highlight the key information related to the calculation of capital gains for individuals and corporations who accrue capital gains in Australia. Further detailed information and tax law surrounding capital gains in Australia (such as which assets are subject to capital gains tax in Australia) can be found at the ATO.

In order to provide an understanding of the capital gains tax laws in Australia, we first review how capital gains are calculated in Australia and the formula used for calculating capital gains for individuals and corporations. We then review the capital gains tax rates and thresholds for 2023. The article finishes with detailed user guides for step-by-step calculation of capital gains tax in Australia using the capital gains tax calculator.

How to calculate Capital Gains Tax In Australia

In order to correcting calculate capital gains tax in Australia, you must first calculate what your capital gain actually is. There are three separate methods for calculating the capital gain in Australia which factor in whether the capital gains are accrued as a company or individual, the residency status and the period for which you have held the assets before sale/transfer et. (the point at which capital gain occurs).

The three separate methods of calculating Capital Gains in Australia are:

1. Discount Method: allows for 50% discount for Australian residents, this method cannot be used by companies.
2. Indexation Method: allows you to increase the cost base by factoring in changes to the consumer price index based on an asset acquired before 11.45am on 21^st September 1999 which has been held for more than one year.
3. Other Method: allows you to calculate capital gains based on the asset value and expenses incurred purchasing/maintaining the asset.

Technically, there is a fourth method which is used for calculating capital loss though the ATO only defines the three methods. The Capital Gains Tax Calculator (CGT Calculator) will automatically calculate all methods relevent based on the criteria you choose in the calculator. If you make a Capital Gain, the most cost efficient means of calculating capital gain will then be used to calculate the capital gains tax due on the capital gain calculated. If you make a Capital Loss, the calculator will display the capital loss only, if you wish to apply this to offset tax due you need to carefully examine the exemption criteria on the ATO or seek professional advice from an accountant to ensure you remain tax compliant.

Capital Gains Tax Rates and Thresholds in Australia

Capital Gains tax is applied at different rates and thresholds for individuals and corporations with differing rules for those with resident and non-resident status.

Capital Gains Tax Rates for Individuals in Australia

Capital Gains for individuals are taxed using the progressive tax rates and thresholds used for the calculation of income tax, in 2023, these are:

Capital Gains Tax Rates for Business in Australia

Capital Gains for corporations (which includes companies, businesses etc.) are taxed at a fixed rate, the fixed rate of Capital Gains tax being determined by the annual turnover of the company:

Capital Gains Tax Calculator User Guide

The following user guides are provided in support of iCalculator Capital Gains Tax Calculator for Australia (which we will refer to as the CGT Calculator in the guides for ease of reading). The guide first covers the common input values, then discusses how to complete a quick capital gains tax calculation before covering the specific process for the calculation of capital gains for Individuals and/or Corporations.

Guide to Common Input Values on the CGT Calculator

If you take a look at the CGT Calculator you will note that the labels next to the input fields have a number to the top right of the title. This number denotes the corresponding number below, this allows us to provide amplifying information so you are clear on what figures you can enter when calculating capital gains or losses using the CGT Calculator.

1. Amount¹: The Amount refers to the elements of cost associated with the cost base or reduced cost base
2. Amounts to be deducted for cost base²: For the cost base, exclude all expenditure recouped or that has been deducted or can be deducted on assets acquired after 7.30pm (by legal time in the ACT) on 13 May 1997. For assets acquired before that time, or in respect of incidental costs and costs of owning, exclude all expenditure recouped that have been claimed or can be claimed as a tax deduction. In some cases, cost base reductions are made before indexing (for example, recouped expenditure) and in others, after indexing (for example, capital works deductions).
3. Amounts to be deducted for reduced cost base³: For the reduced cost base, exclude any expenditure that has been recouped, deducted, can be deducted or is a cost of owning. Indexation does not apply to the reduced cost base.
4. Capital Proceeds⁴: Capital proceeds are the amount of money that you received when you sold on the asset, or that you lost when you disposed of the asset
5. Associated Expenses⁵: Associated Expenses is a broad umbrella term used to define the consolidated amount of all transactional costs (expenses) incurred by the asset, this includes procuring, maintaining, and tertiary associated costs. This figure can be estimated if necessary to provide a directional Capital Gains Tax Calculation when using the "Quick Capital Gains Tax Calculation" element of the CGT Calculator.
6. CPI for quarter when CGT event happened⁶: CPI is the acronym used for the Consumer Price Index. In order to calculate the Capital Gain of an asset using the "Indexation Method", you must enter the CPI rate at the time of the qtr within which you sold or disposed of the asset. A link to the CPI historical rates is provided adjacent the input.
7. CPI for quarter in which expenditure was incurred⁷: CPI is the acronym used for the Consumer Price Index. In order to calculate the Capital Gain of an asset using the "Indexation Method", you must enter the CPI rate at the time of the qtr within which you acquired the asset. A link to the CPI historical rates is provided adjacent the input

CGT Calculator: User Guide for "Quick Capital Gains Tax Calculations"

The "Quick Capital Gains Tax Calculations" process within the CGT Calculator is designed for those who wish to quickly estimate their Capital Gains Tax commitments. This uses a Capital Gains formula similar to that used by the tax formula referred to as the "Other Method" by the ATO (which is in fact a standard method of calculating Capital Gains in countries around the world).

1. Select Normal View or Full Screen View.
2. Confirm what type of Capital Gains do you want to calculate, you can choose to calculate capital gain as an individual on a corporation.
3. Select "Quick Capital Gains Tax Calculation"
4. Enter your "Capital Proceeds", please see the information above if you are not sure what capital proceeds are.
5. Enter your "Associated Expenses", please see the information above if you are not sure what associated expenses are.

That's it!! The CGT Calculator will automatically calculate your Capital Gain and produce a Capital Gains Tax Calculation which is displayed below the CGT Calculator.

CGT Calculator: User Guide for "Detailed Capital Gains Tax Calculations"

1. Select Normal View or Full Screen View.
2. Confirm what type of Capital Gains do you want to calculate, you can choose to calculate capital gain as an individual on a corporation.
3. [If an Individual] Confirm whether you are a resident of Australia or a Non-resident
4. Select "Detailed Capital Gains Tax Calculation"
5. Confirm whether you made a gain from your asset or loss
6. Enter your Capital Proceeds, please see the information above if you are not sure what capital proceeds are. If you made a loss, please enter a whole number. for example, a loss of $10,000.00 should be entered as 10000 and not -10000. So, the number without the minus sign.
7. Confirm if you have had the asset for more than one year or less than one year.
8. [If you have had the asset longer than one year] Confirm if you acquired the asset before 11.45am on 21st September 1999
9. [If you acquired the asset before 11.45am on 21st September 1999] Enter the relevent rates from the consumer price index using the ATO link in that section.
10. Then for each of the following section, enter the amount and amounts to be deducted
    1. Purchase Costs: This is money you paid, property you gave, or you are required to pay or give to acquire a CGT asset. The market value of any property you gave, or are required to give, is worked out at the time of acquisition. Modifications and special rules may apply to this element of the cost base, for example, the market value substitution rule.
    2. Incidental Acquisition Costs: Incidental acquisition costs are gratuities/fees incurred in addition to the main purchase costs
    3. Incidental Costs: This includes the incidental costs of disposal of a CGT asset or, if there is no disposal of a CGT asset, those incidental costs that relate to the CGT event.
    4. Ownership Costs: 'Costs of owning the asset' include interest on borrowed money, rates and land tax, and the costs of repairing or maintaining the CGT asset. You include those costs in the cost base for CGT assets you acquired after 20 August 1991. These costs cannot be indexed nor used to work out a capital loss. You do not include non-capital costs of owning the asset in the cost base of collectables or personal use assets.
    5. Capital Expenditure: This includes funds spent on maintaining or increasing the assets value
    6. Preservation Costs: This includes capital costs to establish, preserve or defend title to, or a right over, the CGT asset

Once the relevent costs and expenditures have been entered, the CGT Calculator will automatically calculate your Capital Gain and produce a Capital Gains Tax Calculation which is displayed below the CGT Calculator if a gain was made. In the event that you had a capital loss, the capitol loss calculation will be shown.

If you found the Capital Gains Tax Calculator useful, you will probably like the Australia Tax Calculator which can be used to calculate income tax and other salary related deductions.