CGT TREATMENT OF COLLECTABLES VS NON- COLLECTABLES
Capital Gains Tax (CGT) applies when you dispose of certain assets — but not all assets are treated the same. A key distinction exists between collectables and noncollectable personal use assets, and understanding this difference is important for managing your tax outcomes.
Collectables include items such as:
- Artwork, jewellery, antiques, coins, rare stamps, and similar valuable items.
Key CGT rules:
- Exempt if acquired for $500 or less.
- If acquired for more than $500, CGT applies when the item is sold or otherwise disposed of.
- Capital losses from collectables can only be offset against capital gains from other collectables (not against shares or property gains).
Non-Collectable Personal Use Assets These are assets kept mainly for personal use or enjoyment, such as:
- Boats, furniture, household items, electrical goods, sporting equipment, and clothing.
Key CGT rules:
- Exempt if acquired for $10,000 or less.
- If acquired for more than $10,000, CGT applies on disposal.
- Capital losses from non-collectable personal use assets cannot be used to offset any other capital gains.
What this means for you
- Keep clear records of purchase prices and dates for both collectables and personal use assets.
- Be mindful that capital losses on these items may be restricted in how they can be applied.
- Strategic planning around when and how you dispose of such assets can help minimise CGT exposure.
- Contact us for tailored advice on managing your CGT obligations.