Question

Assess what CGT events apply to the following transactions:

a) You sell shares in Shell for $5,000.

b) You sell your holiday home at Gold Cost for $750,000 The answer should be as per the Australian taxation rules and policies with relevant sections. I have posted questions earlier as well but didn't get right answer. They would tell me numbers for tax but answer would be $0. So please have a look carefully and in details.

Answer 1

In order to answer this question, first, we need to define what are CGT (Capital Gain Tax) Events:
In the context of taxation and accounting, When you sell an asset that is subject to capital gains tax, then it would be considered a CGT event. This is the point at which you make a capital gain or loss. There are other CGT events, such as the loss or destruction of an asset, or creating contractual or other rights.
(a) You sell shares in Shell for $5,000: In this case, it would be considered an Event A1 the disposal of a CGT asset.
(b) You sell your holiday home at Golden cost for $750,000: In this case, it would be considered an Event A1 disposal of a CGT asset.
Shares in Shell – CGT asset.
Your home – CGT asset. However, your home may be exempt if it is your main residence.

Your home – CGT asset. However, your home may be exempt if it is your main residence.