Question

Marie-Anne bought a property for $250,000 under a contract dated 24 June 2011. The contract provided for the payment of a deposit of $25,000 on that date, with the balance of $225,000 to be paid on settlement on 4 August 2011.

• Marie-Anne paid stamp duty of $5,000 on 20 July 2011. On 4 August 2011, she received an account for solicitor's fees of $2,000 which she paid as part of the settlement process.

• Marie-Anne sold the property on 16 October 2011 (the day the contracts were exchanged) for $315,000. She incurred costs of $1,500 in solicitor's fees and $4,000 in agent's commission.

Calculate the amount of capital gain tax she has earned from this transaction.

Taxable income	Tax on this income
$18,201 – $37,000	19c for each $1 over $18,200
$37,001 – $87,000	$3,572 plus 32.5c for each $1 over $37,000
$87,001 – $180,000	$19,822 plus 37c for each $1 over $87,000
$180,001 and over	$54,232 plus 45c for each $1 over $180,000

Answer 1

Marie-Anne
Calculation of the amount of Capital Gains Tax
(using 50% Discount Method)
No.	Description	Amount. in $
1.	Payment of Deposit	25,000
2.	Settlement Balance	225,000
3.	Stamp Duty	5,000
4.	Solicitor’s Fee – for purchase	2,000
5.	Solicitor’s Fee – for sale	1,500
6.	Agent’s Commission	4,000
	∴ Cost Base (Total)	262,500
Discount Capital Gain = Capital Proceeds – Cost Base (Total) ∴ Discount Capital Gain = $315,000 – $262,500 = $52,500
Net Capital Gain = Discount Capital Gain × 50% Discount ∴ Net Capital Gain = $52,500 × 50% = $26,250
Capital Gain Tax = ($26,250 – $18,200) × 19cents = $1,529.5 or $1,530 (approx.)