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  • Part A2: Capital gains and capital losses from collectables

    Attention

    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

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    Did your entity make a capital gain or a capital loss from a collectable during the income year? Or did the entity receive a distribution from a trust during the income year that includes a net capital gain from a collectable?

    Yes

    Read on

    No

    Go to part A3

    Transfer any capital gains from collectables from the Capital gain or capital loss worksheets to C1, C2 or C3 on your CGT summary worksheet. Transfer any capital losses from collectables to C4 on your CGT summary worksheet.

    If your entity was entitled to a distribution of a net capital gain from a trust resulting from a collectable, show this amount at C5 to C7. You must use the same method as the trustee to calculate your entity's capital gain from the trust. For example, if the trustee used the discount method to calculate a capital gain, you need to do the same and show the grossed up amount at C6.

    If the trustee used the discount method to calculate a capital gain, you gross it up by multiplying the distribution amount by two. Grossing up ensures that any capital losses your entity has made are subtracted from your grossed-up capital gain before the CGT discount is applied.

    The totals of all of your entity's capital gains from collectables are shown at C8 to C10.

    Step A2.1: Deduct any current year capital losses (CYCL) from collectables from current year capital gains (CYCG) from collectables

    If your entity has any current year capital losses from collectables, deduct these from any current year capital gains from collectables. This reduces your CGT obligation. If your entity has current year capital losses from collectables that can be deducted they must be deducted here. You cannot choose to defer to a later year any amount that can be deducted this year.

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    Does your entity have any current year capital gains from collectables?

    No

    Transfer the amount at C4 to H in part I and then go to part A3

    Yes

    Does your entity have a current year capital loss from a collectible?

    • No – Transfer the amounts at C8, C9 and C10 to 1E, 1F and 1G and then go to step A2.2
    • Yes – Read on
     

    Deduct any current year capital losses from collectables (shown at C4) from your current year capital gains from collectables (shown at C8 to C10).

    You can do this in the order that gives the best result, which would usually be to apply the losses against:

    1. capital gains calculated using the 'other' method, then
    2. capital gains calculated using the indexation method, then
    3. capital gains calculated using the discount method.

    Show the amounts deducted from capital gains from your collectables at 1A to 1C, depending on the choice made about how to deduct the losses. The total losses from collectables deducted from gains from collectables are shown at 1D.

    Show any remaining capital gains from collectables at 1E to 1G.

    If your entity has any unapplied current year capital loss from collectables (C4 minus 1D), you can carry this forward to reduce the capital gains from collectables in later income years. Transfer the amount of unapplied current year capital losses from collectables to H-UNCL from collectables in part I.

    Step A2.2: Apply any prior year net capital losses (PYNCL) from collectables.

    If your entity has prior year net capital losses that can be deducted, they must be deducted here. You cannot choose to defer to a later year any amount that can be deducted this year.

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    Does your entity have any remaining current year capital gains from collectables?

    No

    If your entity has prior year net capital losses (PYNCL), complete 2A, 2B and 2C, and transfer the amount at 2C to H in part I. Go to part A3.

    Yes

    Does your entity have a prior year net capital loss from collectables?

    • No – Transfer the amounts at 1E,1F and 1G in step A2.1 to J, K and L in part A3 and continue on from part A3.
    • Yes – Read on
     

    At 2C, show the available prior year net capital losses from collectables after you have made any necessary adjustments for commercial debts forgiven shown at 2B. For more information see commercial debts forgiven, and refer to your entity's tax return instructions.

    Again, prior year net capital losses from collectables can be deducted from any remaining capital gains from collectables in the manner that produces the best result. They must however be deducted in the order in which they were made-for example, a 1995-96 year capital loss should be deducted before a 1998-99 year capital loss.

    At 2D to 2F, show the amounts of prior year net capital losses (PYNCL) from collectables in the order you have chosen.

    At 2G, show the total amount of prior year net capital losses from collectables that have been deducted from the current year capital gains from collectables.

    At J, K and L in step A2.2, show the capital gains from collectables after you have applied the current year capital losses and prior year net capital losses from collectables.

    You can carry forward any unapplied net capital losses from collectables (2C minus 2G) but in later income years you can only use them to reduce any capital gains from collectables (not from other CGT assets).

    When you have completed step A2.2, transfer:

    • the amounts at J, K and L to the corresponding labels in part A3, and
    • the amount of unapplied prior year net capital loss from collectables (referred to above) to H-UNCL from collectables in part I (together with any unapplied current year capital losses from collectables at step A2.1).
    Last modified: 25 Feb 2020QC 27448