Step 2-Complete the CGT summary worksheet

Warning:

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

End of attention

The CGT summary worksheet is used to calculate your entity's net capital gain or net capital loss for the 2001-02 income year. It also provides the information you need to complete the capital gains item on your entity's tax return and, if required, the CGT schedule.

You should include on this worksheet any capital gain your entity is entitled to as a distribution from a trust.

The CGT summary worksheet is designed for entities that make capital gains or capital losses during the income year. However, you may also find it useful if you are an individual (including a partner in a partnership) who has more complex CGT affairs.

Signpost: Transfer the capital gain or capital loss calculated on each Capital gain or capital loss worksheet to the CGT summary worksheet. Transfer a capital gain according to the method you used to calculate it and the type of asset that gave rise to it.

The CGT summary worksheet differentiates between capital gains from active assets and non-active assets. Generally, an active asset is a business asset the entity owns-for example, goodwill of a business. A share and an interest in a trust can also be an active asset if certain conditions are met.

There are 4 CGT small business concessions that may apply to capital gains from active assets:

• the small business 15-year exemption: this exemption, subject to certain conditions being satisfied, means a capital gain is totally disregarded if your small business entity has continuously owned the CGT asset for at least 15 years, and:
  • you are 55 years old or over and retiring, or
  • you are permanently incapacitated
   
•   the small business 50 per cent active asset reduction: this concession provides a 50 per cent reduction of a capital gain for an active asset
• the small business retirement exemption: this allows capital gains for active assets (up to a lifetime limit of $500,000) to be disregarded if the conditions are satisfied. If you are under 55 years old and are eligible for this exemption, the amount must be paid into a superannuation (or similar) fund
• the small business roll-over: this enables you to defer a capital gain if a replacement asset is acquired and other conditions are satisfied.

Note-Active assets

Remember that at Active assets in the CGT summary worksheet (and the CGT schedule), you should only include a capital gain from an active asset that qualifies for one or more of the following CGT small business concessions:

• small business 50 per cent active asset reduction
• small business retirement exemption
• small business roll-over.

If the asset does not qualify for one or more of these concessions, include the capital gain at Non-active assets.

Note-Limit on value of assets

The CGT small business concessions are not available if the net value of the assets of your entity and related entities just before the CGT event exceeds $5 million. If your entity is not entitled to the small business concessions, include the capital gain at Non-active assets.

Note-Life insurance companies

Life insurance companies, including friendly societies that conduct life insurance business, need to complete 2 CGT summary worksheets-one for each class of income they derived (superannuation class and ordinary class income). Capital losses from one class of income can only be applied against capital gains from that class of income.