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  • Capital gains tax

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    Capital gains tax chapter

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    This chapter provides CGT information on individuals, companies and funds, as reported on their individual, company and fund tax returns as well as CGT schedules. Capital gains from partnerships and trusts are not included as it is the partners and beneficiaries respectively from the entities that are required to report the capital gains and/or losses. CGT is the tax payable on any net capital gain included with other assessable income on an entity's (individual, company or fund) tax return. Respective rates of tax apply to a net capital gain.

    A capital gain or capital loss may arise if a CGT event happens, with the most common CGT event being the sale of an asset. Some typical assets are:

    • land
    • shares
    • units in a unit trust or managed investment fund
    • collectables that cost over $500, (for example, jewellery), and
    • personal use assets that cost over $10,000.

    A net capital gain is the total capital gain made by a taxpayer for an income year, reduced by:

    • the taxpayer's total capital losses for the income year and any net capital losses from previous years, and
    • any CGT discount or small business CGT concessions the taxpayer is entitled to.

    If total capital gains are less than total capital losses for an income year, the taxpayer has a net capital loss for that income year. This loss cannot be deducted from assessable income; it can be used only to reduce capital gains in subsequent income years.

    OVERVIEW

    For the 2006-07 income year:

    • net capital gains totalled $78.4 billion, a 53.8% increase
    • net capital gains were reported by 1,366,655 individuals, 31,350 companies and 156,349 funds
    • capital gains tax (CGT) payable on the net capital gains of taxable individuals, companies and funds was estimated to be $17.3 billion, a 52.0% increase
    • 802,199 taxable individuals, companies and funds declared $122.9 billion in total current year capital gains on their CGT schedules, a 42.1% increase,
    • approximately 61.4% ($75.5 billion) of these total capital gains were sourced from share transactions, and
    • 26,548 individuals and 3,772 companies claimed small business CGT concessions worth $2.4 billion and $1.0 billion respectively, a 56.9% and 43.5% increase.
     
      Last modified: 18 Mar 2009QC 21490