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CASE STUDY 1: CAPITAL GAINS TAX
Capital gain or loss is the difference in the cost of an asset and the value of the sale of asset. This capital gain or loss forms the portion of the income tax. In case of capital loss, it can be adjusted against the any capital gain on the asset in the assessment year. Furthermore, in case of excess capital loss, it is carried forward to next assessment year (Hadnum, 2015). For a resident of Australia, tax on capital gain is applicable to all his assets positioned anywhere globally. However, the personal assets such as home, furniture, car etc. and depreciating assets that are only for taxable purpose, e.g. business fittings or equipments on rental property are excluded from capital gain tax. Tax on capital gain was introduced on 20th September’ 1985. Any asset that is acquired after the introduction of capital gains tax are subject to this tax unless it is specified to be excluded (Australian Government, 2016).…………