00:07we're here again with money expert noel Whittaker noelwhittaker.com.au to talk about capital gains
00:13tax there's been a lot of chatter around cgt ahead of the may budget mainly because there is big talk
00:21that they're going to reduce the discount now noel can you explain how this is going to affect
00:28people especially people that are coming into retirement or perhaps those who are retired who
00:33may have an investment property that they might want to sell when Paul Teething brought in capital
00:38gains tax in 1985 he said you couldn't tax inflation so we allowed inflation adjustment
00:48he also said it's not fair to give you a big lump sum of money in your tax return and
00:54he allowed
00:55five years averaging in the Ralph review in 1991 they said that's all too much work and
01:03they replaced the averaging and the indexation with a simple fifty percent off that was supposed
01:10to compensate because the idea is you don't tax inflation so if you make a gain and you've
01:19had the asset for over a year you only pay tax on half the profit now greens and labor have
01:27been attacking this for years the greens formed an inquiry on the 4th of november to investigate
01:34it it reports back on the 14th of march so we'll report it back by now so when the budget
01:41comes in in may i think things are going to happen now the big question is will it be grandfathered
01:50which means will it apply to everybody or only apply to assets that you buy in the future
01:58there's another idea which will bring it bring it in over five years for all assets all investment
02:07assets so it'll be 45 percent next year then 40 other people think that's terrible so it's a case of
02:16wait and see
02:21they can make catch-up super contributions and get a big tax deduction which could wipe out their
02:29capital gains tax but that's tricky and it's also most important to know the date is the date the
02:37contract is signed not the date of settlement now to make a catch-up contribution your super balance
02:46that previous June 30 must be under half a million and the tax deduction must be in the same year
02:55as the date of sale a couple emailed me they sold their house they signed up on the 20th of
03:02june
03:03they settled in august made the tax deductible contributions in august and missed out and that's
03:11why if capital gains tax is an issue get good advice right from the start
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