Saving Capital Gains Tax through deferring an asset sale

You may be able to reduce the amount of tax that you will be required to pay on the sale of an asset.

If you are considering selling a profitable asset this financial year, you may want to defer the sale to the following financial year. This can reduce the amount of CGT you are liable for.

The following is an example of where this might be appropriate:

Amanda is a GP (age 29) taking a year off to volunteer overseas. She has held shares for over a year which she wants to sell. The sale will result in a profit of $5,000. By holding off selling until the following financial year, when her tax rate will change to a much lower bracket (from 41.5% to 16.5%) she will save on tax. This will reduce the amount of CGT she will pay on the sale of the shares from $2,075 to $825, a savings of $1,250.