The treasurer and Treasury have suggested the new inflation-indexing CGT rules will result in a more neutral tax treatment for investment than the previous 50 per cent discount. Further, they assert that previous rules favoured property investment over shares.
In practice, the reverse will be the case. A diversified portfolio of shares will likely fare much worse than housing investment due to a little-understood feature of the pre-1999 rules to which the system is now reverting.
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