Original asset acquired before 20 September 1985



This information may not apply to the current year. Check the content carefully to ensure it is applicable to your circumstances.

End of attention

If you acquired the original asset before 20 September 1985 and if:

  • you repair or restore it or
  • you replace it:
    • at a cost of no more than 120 per cent of its market value at the time of the event or
    • at any cost, provided it, or part of it, was lost or destroyed by a natural disaster and the replacement asset s substantially the same

you are taken to have acquired the repaired or replacement asset before that day.

This means that you disregard any capital gain or loss you make when a later CGT event happens to the repaired or replacement asset.


Replacement after a natural disaster

Henry acquired a semitrailer for his transport business in June 1985. The asset was totally destroyed by a bushfire at a time when it had a market value of $150,000.

Henry is not subject to any cost limit on the purchase of a new semitrailer because the old one was destroyed by a natural disaster. Provided it s substantially the same as the old one, the vehicle is treated as if it had been acquired before 20 September 1985 and any capital gain on a later disposal is therefore not subject to tax.

If it had been destroyed other than by a natural disaster, Henry would have been entitled to claim pre-CGT status for the replacement vehicle only if it had cost no more than $180,000 ($150,000 x 120% ) .

Last modified: 18 Sep 2009QC 18323