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  • Capital gains

    You may make a capital gain or loss if you dispose of a business asset by way of sale, gift or transfer. A business asset might be your business premises, goodwill, or rights or licences.

    You must include any net capital gain you made during the income year in your tax return.

    Your net capital gain is your total capital gains for the year, less:

    • your total capital losses for the year or earlier years
    • any concessions you are eligible for.

    If you have a net capital loss at the end of the income year you cannot use it to reduce your assessable income. However, you can carry it forward to the next year you have a capital gain and offset it against that gain.

    If you operate your business as a company or trust you make a capital gain or loss if you sell or otherwise dispose of your shares in the company, or interest in the trust.

    Capital gains tax (CGT) generally doesn't apply to depreciating assets you use in your business, such as tools or motor vehicles.

    The following rules apply:

    • Individuals or trusts qualify for a 50% discount if they hold an asset for at least 12 months before disposing of it. This means you include only 50% of the capital gain in your assessable income.
    • Companies are not entitled to a CGT discount.
    • Partnerships do not pay tax on capital gains. Instead, the individual partners determine their share of the capital gain when working out their net capital gain to include in their assessable income.
    • If you own active small business assets, you may also be eligible for the small business CGT concessions.

    You must keep records of everything that may be relevant to working out whether you have made a capital gain or loss from an asset.

    See also:

    Last modified: 03 Apr 2017QC 44445