Time of acquisition


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The time a CGT asset is acquired is important for 4 reasons:

  • CGT generally does not apply to pre-CGT assets; that is, assets acquired before 20 September 1985
  • different cost base rules apply to assets acquired at different times-for example, non-capital costs are not included in the cost base of an asset acquired before 21 August 1991
  • the time of acquisition determines whether the cost base of a CGT asset is indexed to take account of inflation and the extent of that indexation (see chapter 2-The indexation method)
  • the time of acquisition also determines whether you are eligible for the CGT discount-for example, one requirement is that you need to have owned a CGT asset for at least 12 months (see chapter 2-The discount method).

If you acquire a CGT asset as a result of a CGT event, certain rules determine when you are taken to have acquired the asset. These rules depend on which CGT event is involved. For example, if you enter into a contract to purchase a CGT asset, the time of acquisition is when you enter into the contract. If someone disposes of an asset to you without entering into a contract, you acquire the asset when you start being the asset's owner. If a CGT asset passes to you as a beneficiary of someone who has died, you acquire the asset on the date of their death.

If you acquire a CGT asset without a CGT event happening, different rules apply to determine when you acquire the asset. If-for example, a company issues or allots shares to you, you acquire the shares when you enter into a contract to acquire them, or if there is no contract, at the time of their issue or allotment.

Last modified: 06 Oct 2009QC 27417