Question

Which assets are eligible for CGT discount method?

Option 1:
All assets are eligible for the CGT discount method.

Option 2:
Only residential properties are eligible for the CGT discount method.

Option 3:
Shares and managed funds are eligible for the CGT discount method.

Option 4:
Only assets held for more than 12 months are eligible for the CGT discount method.

Answer 1

The CGT discount method applies only to assets held for more than 12 months. It is available for various asset types, including shares, managed funds, and real estate, but the holding period is key for eligibility.

Step-by-step explanation:

The question is regarding which assets are eligible for the Capital Gains Tax (CGT) discount method. The correct answer is Option 4: Only assets held for more than 12 months are eligible for the CGT discount method. This includes a variety of asset types such as shares, managed funds, and real estate, but the critical condition is the duration for which the asset has been held. The CGT discount is available to individuals and small businesses, subject to certain conditions and criteria set out by the relevant tax authority. The purpose of the CGT discount is to encourage longer-term investment by providing a tax incentive.