In our previous blog, we discussed what a Capital Gain is and when you may need to pay it. Yes, it was long...
So, we're doing you a favour... We're keeping this blog short!
In this blog, we will discuss what a Capital Loss is and how it can benefit you for future Capital Gains Tax purposes.
You might be asking, if I have to pay tax on capital gains can I use capital losses to decrease my income? The answer is no, the taxation office won’t allow that no matter how fair it seems to you. If you haven’t done so well with some shares or an investment property and you actually sold for less than you purchased, then a capital loss is made. Unfortunately, this capital loss can’t be used to reduce your other income such as your wages. It is kept separate and can only be used to reduce any capital gains you make in the future. Losses are recorded on your e-tax return and rolled forward to next year.
So, there you have it a basic walkthrough of capital gains tax. Remember the above is just for general guidance of how capital gains tax applies in its most basic form. As with anything tax, personal situations and other factors can impact and make the calculation more complex.
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Note that the information provided is general in nature and subject to change, please contact one of our professionals who can evaluate your circumstances and provide more accurate advice to your current situation.
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