Capital gains tax can cost investors tens of thousands of dollars, so how can you minimise it?

Here’s the more important question … oh, Capital Gains, WHEREFORE ART THOU?

You’ve been gone too long! We miss thee. We’ve learned our lesson. All is forgiven. Please come back!

You walked out years ago and left behind your ugly sister, Capital Losses. We are truly sick to death of her. Small doses only. Not only is she hideously unpleasant on the eye (or on a balance sheet), but she ruins everyone’s mood.

We accept your faults, particularly Capital Gains Tax. Please come back! We beseech thee!

Right, enough pseudo-Shakespeare. Capital gains have been thin on the ground. But property, in particular, has continued to provide strong gains and many who cashed up will face CGT bills.

The most important rule of minimising CGT is: “If you never sell, you never pay CGT”. Many growth assets, such as property, should be buy-and-hold-forever style assets, particularly if they have strong and rising incomes to go with them.

But sometimes, taking gains are unavoidable.

CGT can be minimised with proper planning. If your gain is big, chat to your financial adviser and/or accountant before you sell.

Super contributions are a good way of “keeping” more of your gains, either through salary sacrifice (employees), or tax-deductible contributions (self-employed).

Other normal tax-time suggestions can also make sense. Delay income and bring forward expenses, such as tax-deductible purchases, or pre-paying interest on investment loans.

That date of June 30 is important. Sometimes it might be better to delay the sale until July 1. Holding assets for longer than a year will reduce your taxable gain by 50 per cent.

Bruce Brammall is the author of Debt Man Walking (www.debtman.com.au) and principal adviser with Castellan Financial Consulting.