• What is a CGT event?

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    CGT events are the different types of transactions or events that may result in a capital gain or capital loss. Many CGT events involve a CGT asset while other CGT events relate directly to capital receipts (capital proceeds).

    To work out your capital gain or capital loss, you need to know which CGT event applies. The type of CGT event affects when you can include the capital gain in your assessable income and how you calculate the capital gain or capital loss.

    There is a wide range of CGT events. Some happen often and affect many different people while others are rare and affect only a few people. There is a summary of CGT events A1 to K7 at appendix 1.

    The most common CGT event happens if you dispose of an asset to someone else-for example, if you sell or give away an asset. Some other CGT events from which you may make a capital gain or capital loss include when:

    • an asset you own is lost or destroyed (the destruction may be voluntary or involuntary)
    • shares you own are cancelled, surrendered or redeemed
    • you enter into an agreement not to work in a particular industry for a set period of time
    • a trustee makes a non-assessable payment to you from a managed fund or other unit trusts
    • a company makes a payment (not a dividend) to you as a shareholder
    • a liquidator declares that shares you own are worthless
    • you receive an amount from a local council for disruption to your business assets by roadworks
    • you stop being an Australian resident
    • you enter into a conservation covenant or
    • you dispose of a depreciating asset that you used for private purposes.

    Australian residents make a capital gain or capital loss if a CGT event happens to any of their assets anywhere in the world. As a general rule, non-residents make a capital gain or capital loss only if a CGT event happens to a CGT asset that has a necessary connection with Australia.

    Non-Australian residents may also make a capital gain or capital loss where CGT events create:

    • contractual or other rights (CGT event D1) or
    • a trust over future property (CGT event E9).
    Last modified: 06 Oct 2009QC 27417