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  • CGT and depreciating assets

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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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    The uniform capital allowance system (UCA) applies from 1 July 2001. Unlike the previous capital allowance regime for plant which operated prior to 1 July 2001, a capital gain or capital loss from the disposal of a depreciating asset will only arise to the extent that a depreciating asset has been used for a non-taxable purpose (for example, used privately).

    A capital gain or capital loss is calculated using the UCA concepts of cost and termination value and not those found in the CGT provisions (capital proceeds and cost base).

    A CGT event (CGT event K7) happens if a balancing adjustment event occurs for a depreciating asset you held, and at some time during the period you held it, you used it for a non-taxable purpose.

    A balancing adjustment event most commonly occurs for a depreciating asset if you stop holding it (for example, you sell, lose or destroy it) or stop using it.

    Last modified: 25 Feb 2020QC 27448