• Do any CGT exemptions apply to a depreciating asset?

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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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    A number of exemptions may apply to a capital gain or capital loss made from the disposal of a depreciating asset:

    • Pre-CGT assets - A capital gain or capital loss from a depreciating asset is disregarded if the asset was acquired before 20 September 1985.
    • Simplified tax system (STS) assets - A capital gain or capital loss from a depreciating asset is disregarded if you have elected to become an STS taxpayer and you can deduct an amount for the depreciating asset's decline in value under the STS provisions for the income year in which the balancing adjustment event occurred.
    • Personal use asset - If a depreciating asset is a personal use asset (that is, one used or kept mainly for personal use and enjoyment), any capital loss from CGT event K7 is disregarded. A capital gain under CGT event K7 from a personal use asset costing $10,000 or less is also disregarded.
    • Collectables - A capital gain or a capital loss from a depreciating asset that is a collectable costing $500 or less is disregarded.
    • Balancing adjustment event and CGT event - A balancing adjustment event that gives rise to a capital gain or capital loss is only included under CGT event K7. However, capital proceeds received under other CGT events - for example, CGT event D1 - may still be relevant for a depreciating asset as CGT events are not the equivalent of balancing adjustment events.
    Last modified: 04 Mar 2016QC 27527