Hidden death tax in the budget

[pmccarthy]

5 hours ago, octave said:

OK I think I have my answer.

 

https://share.google/aimode/gHgADhB5bpfnRHy3G

 

I think if you don't have a valuation, you can use what is called an "apportionment formula", but in some circumstances, this may be less advantageous.

Yes, that's it thanks. And my experience is that the valuer has to be a recognised valuer by the tax department, and they charge a fortune. So, in the past you could just work from what you had paid but in June next year you may need a valuation that you can't afford. Or just cop it on the chin. And I don't know what a collectible is in general, what about that bloke who restores army tanks?

Edited 5 hours ago by pmccarthy

[Jerry_Atrick]

Farq.. I agree with PM.. it will bring a lot of ordinary people into the net. $500 is not a lot these days and unless you can prove what you have bought is used on a frequent basis, it will be classed as a collectible and if you sell it as yiu don't use it anymore and you make a profit, you pay.

 

But if you make a loss, you can only offset that loss against other gains on collectibles you sell within the tax year.. not even other CGT payable assets let alone your total assemble tax. 

 

This is what I call pernicious tax... And Google tells me thar the official rate of inflation isn't taken into account, but some formula applied by the ATO, which is usually lower than the inflation rate. 

 

This is what I call a pernicious tax or a money grab.

 

There is a carve out for personal use, but you have to prove it and it cant be occasional; it has to be frequent.. In theory, that jewellery necklace bought for wearing on the wedding day and only dragged out for special occasions will he caught.. so yeah, it will affect a lot of ordinary people.

 

 

Edited 3 hours ago by Jerry_Atrick

[octave]

In practice, for the ordinary person, I suspect it will be difficult to enforce.  A CGT already exists; it is just the method of calculation and valuation that has changed (as far as I can see).  If Onetrack sells me some of his lovely junk, how would the ATO even know?

 

Since I have been downsizing, I have sold many possessions, mostly they have lost value, but some musical instruments have gained in value and are probably subject to CGT.  Pretty hard to detect, though. 

  

[willedoo]

In my situation the majority of my aviation collection has come from overseas, so there has been a postage and freight component to the total cost. Also since the government scrapped the $1,000 exemption on paying GST on imported goods, there's a 10% GST component in the total cost, which is 10% of the cost of the item + postage + any customs fees. When working out the cost of the item for determining a capital gain or loss, does the tax department go by the cost of the item only or that plus all other costs incurred.

[octave]

The only CGT I have first-hand experience of was on the sale of my house on 44 acres.  As has been discussed on this forum in the past, there is a rule that you are liable for CGT on everything over 5 acres (2 Hectares).   Unlike CGT on collectables, you are legally allowed to do the valuation yourself (but you may need to show your workings out).

 

The exempt 5 acres need not be one parcel of land, so you choose all the most valuable bits to exempt. In my case, the house and infrastructure (water tanks, septic tanks, etc. and a strip of river frontage. I then was able to deduct the cost of ownership (rates etc maitanance of fences and other things).

 

I was able to aggressively (but legally - I think) whittle the CGT bill down to $1500.   I did half expect a please explain letter; however, it never came, and 9 years later, it is too late for them, unless they detect out-and-out fraud.

 

I did plenty of research, and I actually found in an obscure place a tax department internal document that listed the conditions that trigger an audit with regard to land sales, so I felt on safe ground. The thing is, compared to some people selling land, my case was pretty trivial. It does not really make sense for ATO to spend vast sums of money detecting the sale 1 watch or piece of jewellery in a private sale.  This is not tax advice!  

[willedoo]

I agree there octave. People selling small items are probably not  going to come under scrutiny. More likely if you sell a large valuable coin or jewellery collection in one lot. A bit like centrelink with applications for pension or income support. Technically you are supposed to list the value of personal items and I'd say most people undervalue or don't list them at all. That's accepted and I've never heard of anyone getting an audit of their personal items.

[onetrack]

They would need to double or triple the size of the audit teams to be able to deal with the amount of "collectibles" of modest value, that regularly change hands. So much of it is done in cash transactions.

[Siso]

7 hours ago, facthunter said:

Which side Looks after the Rich the most?. Nev

All sides

 They all have people lobbying talking bribes with them. Do you really believe different