Is a Capital Gains Tax Shake-up Looming?

Is a Capital Gains Tax Shake-up Looming?

Are you?	- An investor?
At a glance:	- In a bid to encourage long-term investment in Australia, there may be major changes to the taxation treatment of capital gains in the foreseeable future.
You should:	- Be aware that the final Henry Tax Review report has not yet been released. - Contact us if you require any clarification or advice.

1.	As the public awaits the release of the final Henry Tax Review report, there is growing speculation that one of the recommendations will be to make changes to the current Capital Gains Tax [CGT] system.
2.	In its preliminary report, the Henry Tax Review recommended that the Federal Government engage in an overhaul of CGT concessions for investors and small business as the system is currently too complicated and does not encourage long term investment.
3.	It has been proposed that the 50% capital gains discount for assets held for greater than 12 months should be scrapped and a new system created.
4.	Various proposals for alternative systems that encourage long term investment include the introduction of a standard flat rate on capital gains, reintroduction of indexation to tackle the impacts of inflation on capital returns and increasing the holding period for eligibility for CGT discounts.
5.	For more information on the progress of the Henry Tax Review, visit the Treasury website at www.treasury.gov.au