• Cost base and reduced cost base

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

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    For most CGT events, the cost base of a CGT asset is important in working out if you have made a capital gain. For some CGT events, however, cost base is not relevant. In these cases the provisions dealing with the relevant CGT event explain the amounts to use to work out your capital gain.

    For example, if you enter into an agreement not to work in a particular industry for a set period of time, CGT event D1 specifies that you make a capital gain or loss by comparing the capital proceeds with incidental costs.

    In working out a capital gain, you determine the cost base of the CGT asset involved in the CGT event. In working out a capital loss, you determine the reduced cost base of the CGT asset involved in the CGT event.

    Last modified: 18 Sep 2009QC 18323