Introduction to capital gains tax

Timing of a CGT event

The timing of a CGT event is important because it tells you which income year to report your capital gain or capital loss in and governs whether or not you are entitled to the CGT discount.

If you dispose of a CGT asset, the CGT event happens when you enter into the contract for disposal. (For real estate transactions, see Timing of a real estate CGT event.) If there is no contract, the CGT event generally happens when you stop being the asset's owner.

If your CGT asset is lost or destroyed, the CGT event happens when you first receive compensation for the loss or destruction. If you do not receive any compensation, the CGT event happens when the loss is discovered or the destruction occurred.

Example: Insurance policy

Laurie owned a rental property that was destroyed by fire in June. He received a payment under an insurance policy in the following October. The CGT event was the insurance payment, not the fire, so Laurie reports his capital gain or capital loss in the income year he received the payment, not the income year his house was destroyed.

The CGT events relating to shares and units, and the timing, are dealt with in Shares and units.

Capital gains tax - home

Sections within Selling an asset and other 'CGT events'

• Types of CGT events
• Timing of a CGT event
• Compensation payments
• Residency and CGT events