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CGT on shares held by a proprietary company

Discussion in 'Accounting, Tax & Legal' started by foreverwin, 22nd Oct, 2008.

  1. foreverwin

    foreverwin New Member

    Joined:
    22nd Oct, 2008
    Posts:
    2
    Location:
    Sydney
    hi guy,

    I currently trade shares thru a sole director proprietary company and there is no
    other activities carried on via my company.

    Can some professional please tell me that how i'm assessed my CGT?
    Say, assume that i usually hold shares for less than one year and i will not allocate any income from the company to shareholde (me)...

    do i just get a 30% company tax rate on those CG profit i made?


    Additionally, can i just keep all my after tax profit out of my company? I heard some says only company only allowed 70% of after-tax net profit in the company.
     
  2. GavinC

    GavinC Active Member

    Joined:
    11th Apr, 2007
    Posts:
    27
    Location:
    London
    CGT is taxed the same way as trading income for a company (ie you do not get the benefit of the 50% CGT discount if you hold the shares longer than 1 year). The tax rate is currently 30%

    While all the after tax income is entirely available for distribution to the shareholders, you shouldn't simply transfer the money from the company's bank account to your own without knowing what the consequences might be, in particular with regards to Division 7A. Depending on your personal circumstances you may be better off paying a dividend instead.
     
  3. foreverwin

    foreverwin New Member

    Joined:
    22nd Oct, 2008
    Posts:
    2
    Location:
    Sydney
    thanks Gavin

    Cheers mate!!