Cooper points to unknowns with CGT exemptions
While the small business capital gains tax exemptions are seemingly unaffected by the proposed budget changes, according to Challenger’s Jeremy Cooper, there are some areas of uncertainty.
Speaking at event hosted by Spring Financial Group, Mr Cooper, Challenger's chair of retirement income, said the government will have further consultation to do on how the capital gains tax rules will operate in the new post-budget environment.
"There is a bit of working out to do around the capital gains tax and how that will work, in the new environment," said Mr Cooper.
"[For example] in a situation where you’ve got a large asset with an unrealised gain sitting in it, you then go into the new regime and later dispose of it. When is the start date? Does it just go back to when the asset was acquired? Is there some middle ground? These are all details I guess."
Mr Cooper said the government has signalled there is going to be consultation about the implementation of this.
"They’ve very clearly said that there aren’t going to be any back-flips on the overall things that have been announced, but clearly there are implementation details yet to be worked out on this measure in terms of what does a capital gain look like in the new environment," he said.
Mr Cooper noted that even though practitioners and their clients may be concerned about capital gains tax with assets in the accumulation phase under the new proposals, if the assets have been held for more than 12 months, it is "already in two thirds discount territory, which reduces the tax to a mere 10 per cent".
"It is still a highly concessional environment," he said.