Now is the time to turn our minds to capital gains tax

Therefore, if you're thinking of a signing a sales contract in the next few weeks, the date 30 June should be prominent in your thinking. Furthermore, to be eligible for the 50 per cent discount, which halves how much CGT you have to pay, the asset must have been held for over a year.

CGT is calculated by adding the net gain (that is, after costs have been accounted for) to your taxable income in the year the sales contract is signed.

Therefore, if you have had, or expect to make, a capital gain in the current financial year you should be trying to find ways to minimise your taxable income in this year. The best way to do this is by tax-deductible superannuation contributions, if they are appropriate for your situation.

Since 1 July 2018, anybody with a superannuation balance of less than $500,000 at 30 June in the previous financial year has been able to use their unused concessional contributions caps to make additional concessional contributions - these are known as catch-up contributions.

The amount that can be contributed is calculated on a rolling basis for a period of five years, but that have not been used after five years will expire.

So in the 2024 financial year, five years of unused amounts can be carried forward, as well as this year's cap: the total amount varies depending on your personal circumstances.

CASE STUDY Jack and Jill are both aged 65 and have been retired for five years. Jack's superannuation is $700,000 and Jill's is minimal. They expect to sell a jointly owned investment property in the latter half of 2024 that will trigger a taxable capital gain of $400,000, and they will only have to pay tax on $200,000 of that after the 50 per cent discount. Because it is jointly owned, the gain will be split again, giving them $100,000 each. Because neither has made any concessional contributions since they retired, they have the right to "catch up" for those five years with contributions of up to $132,500 [MD1] in the 2025 financial year, provided their super balances are less than $500,000 at 30 June 2024. They both make a deductible contribution of $100,000, and the CGT is eliminated.

Anybody thinking of using this strategy should be aware of the changes to the rules that take place on 1 July. And remember it's possible to contribute tax-deductible contributions to super till age 75 as long as you can pass the work test.

This is not hard to do - all you need to do is work for 40 hours in 30 consecutive days in the financial year you make the contribution. Given the sad state of employment in the economy right now I don't think too many older people find that too difficult.

Just make sure you involve your financial advisor every step of the way.

As always take expert advice before you act. There are big penalties for getting it wrong.

I am 72, still working and have $550,000 in super, almost all of it in a pension account from which I receive the minimum mandatory withdrawal amount. The ATO site in MyGov states that I am not eligible to carry-forward unused concessional contributions cap because my total super balance exceeds $500,000. If I reduce the total balance to below $500,000 by taking a lump sum withdrawal would that make me eligible for the carry-forward arrangement? I'm looking to generate contributions to reduce a capital gains tax liability.

The strategy appears sound. As you are under 75 and still working you can make deductible concessional contributions to super. Eligibility for catch-up contributions works on your balance at last 30 June - so to make the transactions you wish in the next financial year you would need to make sufficient withdrawals to reduce the balance to under $500,000 at 30 June 2024. Just keep in mind when calculating catchup contributions that the employer contribution is included. I suggest you seek advice.

I have four children and I want my assets to be equally divided on my death ( home, investment house, managed funds . I also have an investment property purchased in 1993 for $275,000, now worth 1.6 million- It had been let until 12 months ago when my widowed daughter and her children , who were previously living there at market rent, began to reside there rent free . Because of their situation it will remain that way. I wish them to have the property when I die. In terms of CGT would it be better to leave the property to her in my will, or transfer to her name now? I am trying to minimise CGT as she is not very affluent.

If it's transferred to her before your death, you will be liable for capital gains tax which would be substantial given the large gain. However, if you leave the property to her in your will no CGT will be triggered on your death and will only be payable if and when she sells the property. If she continues living in the property for many years the capital gain will increase but the proportion of it that will be taxable reduces pro rata as time goes by. Once it is in her name she can cover it with her main residence exemption going forward. She will be able to increase her cost base by any holding costs not claimed as a tax deduction by you or her. This includes interest, rates, insurance, repairs and maintenance even cleaning materials. What you need to weigh up is whether it is worth paying the CGT and stamp duty now to transfer it into her name, the sooner she can start covering it with her main residence exemption verses the probability of her choosing never to sell it in her life time so the CGT will disappear.