Choices you make under capital gains tax

Examples of choices available under capital gains tax

Examples of CGT choices you make include the following:

• To use the indexation method rather than the CGT discount method if a CGT event happens to a CGT asset you acquired before 21 September 1999 (or are taken to have acquired before that date for the purpose of using those methods)
   
• To make a capital loss for the income year in which a liquidator or administrator declares in writing that shares or securities held in a company are worthless.
   
• To rollover a capital gain if a company you hold shares in is taken over and you receive shares in the takeover company and the takeover meets certain conditions. (This is known as scrip-for-scrip rollover. It can also apply if a trust/fund you hold units in is taken over and you receive units in the takeover trust/fund. The company or trust/fund will usually advise investors if the conditions for rollover are met.)
   
• To rollover a capital gain if you hold shares in a company that demerges or splits and you receive shares in the demerged company and the demerger meets certain conditions. (Rollover can also apply if you hold units in a trust/fund that demerges and you receive units in the demerged trust/fund. The head company or head trust/fund will usually advise investors if the conditions for rollover are met.)
   
• To rollover a capital gain if you receive money or property (or both) as compensation for the loss or destruction of an asset or for the compulsory acquisition of an asset by an entity (other than a foreign government agency) or the disposal of land after the compulsory granting of a mining lease and certain conditions are met.
   
• To treat a dwelling as your main residence even though you
• no longer live in it (see Treating a dwelling as your main residence after you move out), or
• are yet to live in it but will do so as soon as practicable after it is constructed, repaired or renovated, and will continue to live in it for at least three months (see Treating land as your main residence).

For the main residence exemption, you make the choice when you prepare your tax return for the year in which you enter into the contract to sell the dwelling. If you own both the dwelling that you can choose to treat as your main residence for one of the periods above, and the dwelling you actually lived in during that period, you make the choice for the year you enter into the contract to sell the first of those dwellings.