What is capital gains tax?

Capital Gains Tax was introduced in Australia in 1985 and applies to any asset you’ve acquired since that time unless specifically exempted. According to the Australian Tax Office, a capital gain or capital loss on an asset is the difference between what it cost you and what you receive when you dispose of it. You pay tax on your capital gains, which forms part of your income tax and is not considered a separate tax – though it’s referred to as CGT. If an asset is held for at least one year, then any gain is first discounted by 50 per cent for individual taxpayers or by 33.3 per cent for superannuation funds.