Module 1 - Reading 1.7 Peirson et al. 1997 Essentials of business finance, 1997 - Section 1.9.2 Capital Gains Tax

On reading the ATO website (www.ato.gov.au) and with consulting H&R Block (tax accountants), I would like to make a few comments on reading 1.7. The Australian tax system has been overhauled in a big way by the government (ATO) since this reading was published. With regards to Capital Gains Tax (CGT), from September 1999, the averaging rule has been replaced by the "indexation", "discount" or "other" method of taxing capital gains. Indexation method - if asset purchased before Sep 1999, the cost base is indexed for inflation, if held for more than 12 months Discount method - if the asset is held for more than 12 months, half the CG is added to assessable income Other method - if asset is held for less than 12 months, full CG is added to assessable income. Secondly, the rate of Company tax has been progressively reduced from 36% (as shown in table 1.5 of the reading) to 34% in July 2000 and is now 30% from July 2001. Lastly, the tax rates shown on table 1.4 have been continually changing (they were even revised in the last budget in May of this year). Best reagrds, Gus Lobo Student ID 071162