CGT effective tax rate exceeding real gains

Question

Senator BRAGG: Where we were on the CGT issues-can a person pay a higher effective tax rate than the real gain if they have a portfolio of shares? Dr Johnson: It would depend on the circumstances of their investment, the portfolio, how long they hold it for, the inflation rate-a number of factors. Senator BRAGG: Sure. But there could be a scenario where they could pay a higher effective tax rate than the real gain? Dr Johnson: You could do that under the current system. You could get a higher effective tax rate above 100 in the current system. Senator BRAGG: So you could do that under the new system? Dr Johnson: But you can get it under the current system. Senator BRAGG: What about the new system? Dr Johnson: Theoretically, it's possible, but I don't know. I need to work it out. I need to take that on notice.

Answer

See attached response.

Documents

• Question with answer (PDF) (opens in a new tab)
• SQ26-000465 BET224 - CGT effective tax rate exceeding real gains.pdf (opens in a new tab)