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Notes where choosing the CGT discount method

Last updated 17 September 2009

You can make copies of the worksheets that follow these notes. Use a separate worksheet for each separate asset or parcel of shares or units.

Description of asset

For example, ‘Parcel of 1000 shares in XYZ Ltd’.

Type of asset

Tick the box that applies.

Column 1: Date incurred

The date that you incur a cost is generally the date on which you make the payment.

Column 2: Description of expenditure

The cost base of an asset includes the 5 elements listed below. See page 5 for further information.

  • The cost of acquiring the asset.
  • Incidental costs of acquiring the asset or of the CGT event.
  • Non-capital costs of ownership if the asset was acquired after 21 August 1991.
  • Capital expenditure on any improvements that are reflected in the asset at the time of the CGT event.
  • Capital expenditure on maintaining title or rights to the asset.

Column 3: Amount

This information will be recorded on the documents and receipts relating to the expenditure.

Column 4: Amount to be deducted for cost base

Expenditure that you have deducted or can deduct does not form part of the cost base. This applies to all expenditure on assets acquired after 13 May 1997. Prior to that date you need to exclude from incidental costs and non-capital costs of ownership any amounts that you have deducted or could deduct. Any amounts that you have received as recoupment of expenditure also do not form part of the cost base – for example, an insurance payment in respect of the expense. For more information see Cost base and reduced cost base.

Column 5: Net amount

The amount in Column 3 minus the amount in Column 4.

Column 6: Amount to be deducted for reduced cost base

The reduced cost base does not include an amount that you have deducted or can deduct. Any amounts that you have received as recoupment of expenditure also do not form part of the reduced cost base. However, the amounts will form part of the reduced cost base if you have included them in your assessable income. See Reduced cost base.

Column 7: Balancing adjustment

This is any amount included in your assessable income for any income year because of a balancing adjustment for the asset. Refer to Reduced cost base for more information.

Column 8: Reduced amount

Take away the amount in column 6 from the amount in column 3. Then add to this figure the amount in column 7.

Totals

Cost base

Total of the amounts in column 5.

Reduced cost base

Total of the amounts in column 8.

Note: Commercial debt forgiveness rules may affect your cost base and reduced cost base. See Debt forgiveness.

Date of CGT event

  • If you disposed of an asset to someone else, say, under a contract, it is the date the contract was made.
  • If the asset was lost or destroyed, it is the date you received compensation.
  • If you do not receive any compensation, it is the date when the loss is discovered or the destruction occurred. For more information, see the section What is a CGT event?

Capital proceeds

Capital proceeds from a CGT event are the money and the value of other property you received or are entitled to receive when the CGT event happened.

QC18323