As you make your way through the financial lifecycle, in the pursuit of financial independence, you may find yourself disposing of an asset from time to time.
When this does occur, you may also find that you make a capital gain or loss, depending on what it cost you to acquire the asset, and what you receive (or are entitled to receive) when you dispose of it. Importantly, if you do make a capital gain, tax is generally payable as part of your income tax, referred to as capital gains tax (CGT).
In this animation, we illustrate some of the main points surrounding CGT; however, as CGT is a complex area, exceptions can apply to the general overview that we have provided. With this in mind, it’s important to seek professional advice regarding capital gains, losses and CGT.