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Policy Forum: The Australian Experience with Preferential Capital Gains Tax Treatment—Possible Lessons for Canada

Author

Listed:
  • John Minas

    (Curtin Law School, Curtin University, Perth)

  • Youngdeok Lim

    (University of New South Wales (UNSW) Business School, UNSW Sydney)

  • Chris Evans

    (UNSW Business School, UNSW Sydney)

  • François Vaillancourt

    (Université de Montréal)

Abstract

This article compares the preferential tax treatment of capital gains in Australia and in Canada, with a view to determining whether there are any lessons from the Australian experience that may be of relevance to Canada. The tax treatment of capital gains is similar in the two jurisdictions in that both apply a 50 percent inclusion rate or the equivalent. Several aspects of the taxation of capital gains in Australia might be considered cautionary from the Canadian perspective. The Australian experience indicates that winning support for an increase in the capital gains inclusion rate can prove difficult, as demonstrated by the unsuccessful proposal by the Australian Labor Party, during the 2019 federal election campaign, to effectively raise the inclusion rate to 75 percent.

Suggested Citation

  • John Minas & Youngdeok Lim & Chris Evans & François Vaillancourt, 2021. "Policy Forum: The Australian Experience with Preferential Capital Gains Tax Treatment—Possible Lessons for Canada," Canadian Tax Journal, Canadian Tax Foundation, vol. 69(4), pages 1213-1230.
    • Handle: RePEc:ctf:journl:v:69:y:2021:i:4:p:1213-1230
    DOI: https://doi.org/10.32721/ctj.2021.69.4.pf.minas
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