Welcome back to the 2nd part of our glossary of terms. We hope the 1st part was helpful to you. Let’s get on with the 2nd part, shall we?
- Capital gains tax (CGT) – is the tax you pay on a capital gain. It is not a separate tax, just part of your income tax. The most common way you make a capital gain (or capital loss) is by selling assets such as real estate, shares, or managed fund investments.
- Negative Gearing – is a form of financial leverage where an investor borrows money to invest. Still, the net income generated by the investment is less than the interest on the borrowings and other costs to own and manage the property.
- Positive Gearing – a property that leases out for more than the combined expenses, generating a monthly income for the owner
- Tax Deductions – a reduction of the income subject to tax, for various items, especially expenses incurred to produce income.
- Fringe Benefits Tax (FBT) – a tax paid on certain benefits you provide to your employees or your employees’ associates. FBT is separate from income tax and is based on the taxable value of the various fringe benefits you provide.
- ABN (Australian Business Number) – a unique identifier issued by the Australian Business Register (ABR) which is operated by the Australian Taxation Office (ATO)
- ACN (Australian Company Number) – is a unique nine-digit number issued by the
Australian Securities and Investments Commission (ASIC) to every company registered under the Commonwealth Corporations Act 2001 as an identifier.
These are the most common terms you would usually hear. Let us know of anything that may have been missed and we would be happy to list them down for you in our 3rd part of this Glossary Series. Contact us by leaving your comments below or contact us at [email protected] or 1300 669 336. At Wealth Safe, we’re here to help you with all your asset protection, tax planning, business structuring, and superannuation needs. We work with you to find the best strategy to keep your assets safe, slash your tax 100% legally, and put more money in your pocket.
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