Introduction to capital gains tax

Date of acquisition

Generally, the time you acquire a CGT asset (your 'acquisition date' for CGT purposes) is when you become its owner, most commonly because you have bought it or received it as a gift or it was transferred to you.

However, there are two situations where your acquisition date is likely to be different from the date you become the owner: when you inherit a CGT asset and when you buy one under contract and don't take immediate possession.

Knowing when you got your CGT asset is important because:

• you aren't liable for CGT if you owned it before CGT was introduced (a pre-CGT asset)
• the rules about how you work out the cost base of your asset have changed over time
• how long you have had it affects what methods you can use to work out your capital gain, and
• you need to keep records starting from your acquisition date to ensure you don't pay more tax than you need to.

Inherited CGT assets

The date you inherit an asset is the date of the death of the person who bequeathed the asset to you.

CGT assets bought under contract

Purchases under contract, such as land, houses, businesses, shares, one-tonne utilities and boats, don't always result in the date of contract and the date of possession being the same. In these instances, your acquisition date is the time you enter into the contract (normally the date on the contract) and not the date you take possession or the date of settlement.

Capital gains tax - home

Sections within Acquiring and owning CGT assets

• Date of acquisition
• Joint ownership
• Record keeping for CGT
• Records relating to inheritance