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Step 2 - How to complete the CGT summary worksheet

Last updated 20 April 2020

You use the CGT summary worksheet (PDF 320KB)This link will download a file to calculate your entity's net capital gain for the 2005-06 income year or net capital losses carried forward to later income years. It also provides the information you need to complete the capital gains item on your entity's tax return and, if required, the CGT schedule.

You should include on this worksheet any capital gain your entity is entitled to as a distribution from a trust.

The CGT summary worksheet (PDF 320KB)This link will download a file is designed for entities that make capital gains or capital losses during the income year. However, you may also find it useful if you are an individual (including a partner in a partnership) who has more complex CGT affairs.

The CGT summary worksheet (PDF 320KB)This link will download a file differentiates between capital gains from active assets and non-active assets. Generally, an active asset is a business asset the entity owns - for example, goodwill of a business.

A share and an interest in a trust can also be active assets if certain conditions are met.

There are four small business CGT concessions that may apply to capital gains from active assets:

  • The small business 15-year exemption: this exemption, subject to certain conditions being satisfied, means a capital gain is totally disregarded if your small business entity has continuously owned the CGT asset for at least 15 years, and:
    • you are 55 years old or over and retiring, or
    • you are permanently incapacitated.
     
  • The small business 50% active asset reduction: this concession provides a 50% reduction of a capital gain for an active asset.
  • The small business retirement exemption: this allows you to disregard capital gains for active assets (up to a lifetime limit of $500,000) if the conditions are satisfied. If you are under 55 years old and are eligible for this exemption, you must pay the amount into a superannuation (or similar) fund.
  • The small business rollover: this enables you to defer a capital gain if you acquire a replacement asset and satisfy other conditions.

To find out if your business is eligible for the small business CGT concessions, see the Guide to capital gains tax concessions for small business 2005–06.

Active assets

Remember that at Active assets in the CGT summary worksheet (PDF 320KB)This link will download a file (and the CGT schedule), you should only include a capital gain from an active asset that qualifies for one or more of the following three small business CGT concessions:

  • small business 50% active asset reduction
  • small business retirement exemption
  • small business rollover.

If the asset does not qualify for one or more of these three concessions, include the capital gain at Non-active assets.

Limit on value of assets

The small business CGT concessions are not available if the net value of the assets of your entity and related entities just before the CGT event exceeds $5 million. If your entity is not entitled to the small business concessions, include the capital gain at Non-active assets.

Life insurance companies

Life insurance companies, including friendly societies that conduct life insurance business, need to complete two CGT summary worksheets (PDF 320KB)This link will download a file - one for each class of income they derived (superannuation class and ordinary class income). You can only apply capital losses from one class of income against capital gains from that class of income. Combine the details from both summary worksheets onto one CGT schedule, if it is required.

The parts in this step relate to the parts of the CGT summary worksheet (PDF 320KB)This link will download a file. Work through each relevant part to complete your worksheet.

Part A: Total current year capital gains

In part A you show your entity's total current year capital gains.

Part A1: Current year capital gains (other than capital gains from collectables)

What to include and exclude

You generally do not include any capital gain to which an exemption (for example, the small business15-year exemption) or exception applies.

However, you must include in the Active assets columns capital gains for which your entity may be exempt because it is entitled to one or more of the following:

  • small business 50% active asset reduction
  • small business retirement exemption
  • small business rollover.

If a capital gain does not qualify for one or more of these three concessions, include it at Non-active assets.

At A to I and M to U on this worksheet, show the current year capital gains (other than from collectables) transferred from the Capital gain or capital loss worksheets (PDF 532KB)This link will download a file.

Trust capital gains

You must also include at G to I and S to U on this worksheet any distribution from a trust of a net capital gain from a CGT event (other than one involving a collectable) that your entity is entitled to.

You must use the same method as the method used by 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 must use the discount method. In some cases your entity must gross up the amount of the trust capital gain. If this applies, you include the grossed-up amount at H, S, T and U, as explained below.

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

If the trust's capital gain was reduced by the small business 50% active asset reduction, again it needs to be grossed-up by multiplying the distribution amount by two. Include the result at S or U.

If the trust's capital gain was reduced by the CGT discount and by the small business 50% active asset reduction, multiply the distribution amount by four and include the result at T.

Amount of capital gain

Show the full amount of all capital gains in part A1.

Do not show the amount remaining after applying:

  • capital losses (which are applied on page 4 of the worksheet at part D)
  • the CGT discount (which is applied on page 6 of the worksheet at part F), or
  • the small business CGT concessions (which are applied on page 7 of the worksheet at part G).

Transfer the amounts at A1 to A6 to the corresponding A1 to A6 in part A3 of the CGT summary worksheet (PDF 320KB)This link will download a file.

Part A2: Capital gains and capital losses from collectables

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 (PDF 532KB)This link will download a file to C1, C2 or C3 on your CGT summary worksheet (PDF 320KB)This link will download a file. Transfer any capital losses from collectables to C4 on your CGT summary worksheet (PDF 320KB)This link will download a file.

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, gross it up by multiplying the distribution amount by two. Grossing up ensures that any capital losses your entity has made are deducted from your grossed-up capital gain before the CGT discount is applied.

Show the totals of all of your entity's capital gains from collectables 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.

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 CYCL from a collectable?

  • 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 capital gains calculated using the:

  1. 'other' method
  2. indexation method
  3. 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. Show the total losses from collectables deducted from gains from collectables at 1D.

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

If your entity has net capital losses from collectables (C4 minus 1D), you can carry this forward to reduce the capital gains from collectables in later income years. There is no time limit on how long you can carry forward this loss. Transfer the amount of net 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

Prior year net capital losses are the unapplied net capital losses carried forward from earlier years.

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

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

No

If your entity has 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 PYNCL from a collectable?

  • No – Transfer the amounts at 1E, 1F and 1G in step A2.1 to J, K and L in part A3 and continue 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 on commercial debts forgiven, see Debt forgiveness and refer to your entity's tax return instructions.

Again, you can deduct PYNCL from collectables from any remaining capital gains from collectables in the manner that produces the best result. You must, however, deduct them in the order in which they were made - for example, you should deduct a 1995-96 year capital loss before a 1998-99 year capital loss.

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

At 2G, show the total amount of prior year net capital losses from collectables that you have 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). There is no time limit on how long you can carry forward these losses.

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 losses from collectables (referred to above) to H UNCL from collectables in part I (together with any net capital losses from collectables at step A2.1).

Part A3: Total current year capital gains (CYCG)

At A3, show the total of your entity's capital gains, including any net capital gain from collectables.

Your entity may not have any of the following losses:

  • current year capital losses
  • prior year net capital losses, or
  • capital losses transferred in.

In this case, transfer the amounts at A7 to A12 in part A3 to A to F in part E and continue from part F.

If your entity has one or more of these losses, read on.

Part B: Current year capital losses (CYCL), other than from collectables

In part B, show any current year capital losses your entity has made from:

  • shares and units (in unit trusts) at A
  • real estate at B, and
  • other CGT assets and any other CGT events at C.

Show the total at D.

You can transfer these from your Capital gain or capital loss worksheets (PDF 532KB)This link will download a file.

If your entity does not have any current year capital losses (other than from collectables), go to part D.

Do not include any capital loss made from personal use assets at C Other CGT assets and any other CGT events. You disregard capital losses from personal use assets and cannot apply them to reduce capital gains.

Do not show capital losses made from collectables in part B - they should have been shown in part A2.

Now go straight to part D - there is no part C in this worksheet.

Part D: Applying capital losses against current year capital gains

In part D, show your entity's current year capital gains reduced by:

  • current year capital losses, other than from collectables (step D1)
  • prior year net capital losses, other than from collectables (step D2) and
  • capital losses transferred in (for companies only - step D3).

Step D1: Apply current year capital losses, other than capital losses from collectables

If your entity has current year capital losses (other than capital losses from collectables) that can be deducted, you must deduct them here. You cannot choose to defer to a later year any amount that can be deducted this year.

Have you shown current year capital gains for your entity at A7 to A12 in part D?

No

Transfer D in part B to I in part I of the worksheet, then go to step D2.

Yes

Does your entity have CYCLs or PYNCLs, other than from a collectable, or capital losses transferred in?

  • No – Transfer the amounts at A7 to A12 in part D to A to F in part E and continue from part F.
  • Yes – If your entity has CYCL, read on. If your entity has only PYNCL, transfer the amounts at A7 to A12 in part D to 3G to 3L in step D1 and then go to step D2. If your entity has only capital losses transferred in, go to step D3.
 

You can choose the order in which you deduct your entity's current year capital losses (at D in part B) from the current year capital gains (at A7 to A12).

Generally, if your entity is entitled to the small business CGT concessions, it is better to reduce the non-active asset capital gains first. Within the non-active and active categories you usually get the greatest benefit by reducing:

  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.

At 3A to 3F, show the amounts of current year capital losses deducted in the order you have chosen with the total at H. At 3G to 3L, show the capital gains after applying (deducting) the current year capital losses.

You can carry forward net capital losses other than from collectables (D in part B minus H) to reduce capital gains in later income years.

When you have completed step D1, transfer the amount of net capital losses (D minus H) to I UNCL from other CGT assets in part I.

Step D2: Apply any prior year net capital losses, other than PYNCL from collectables

Prior year net capital losses are the unapplied net capital losses carried forward from earlier years.

If your entity has prior year net capital losses (other than prior year net 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.

Does your entity have any current year capital gain remaining?

No

If your entity has PYNCL, complete 4A, 4B and 4C and transfer the amount at 4C to I in part I. Go to part E.

Yes

Does your entity have any PYNCL, other than collectables?

  • No – If your entity is a company with capital losses transferred in, go to step D3. Otherwise, transfer 3G to 3L in step D1 to A to F in part E and continue from part F.
  • Yes – Read on.
 

Reduce the prior year net capital losses at 4A by any adjustment for commercial debts forgiven at 4B. For more information on commercial debts forgiven, see Debt forgiveness and refer to your entity's tax return instructions.

Again, you can deduct prior year net capital losses from any remaining capital gains in the way that produces the best result. See discussion for step D1. However, you must deduct them in the order in which they were made - for example, you must deduct a 1995-96 year capital loss before a 1998-99 year capital loss.

At 4D to 4I, show the amounts of prior year net capital losses in the order you have chosen and the total at L. At 4J to 4O, show the capital gains after you have applied the current year capital losses and prior year net capital losses.

You can carry forward any unapplied prior year net capital losses (4C minus L) to reduce the capital gains in later income years. There is no time limit on how long you can carry forward these losses.

When you have completed step D2, transfer the amount of unapplied prior year net capital losses (4C minus L) to I UNCL from other CGT assets in part I (together with any net capital losses at step D1).

Note: If your entity is a company with capital losses transferred in, go to step D3.

Otherwise, transfer the remaining capital gain amounts at 4J to 4O to A to F in part E.

Step D3: Apply any capital losses transferred in

Only follow this step if your entity is a company with capital losses transferred in.

You need to apply the capital losses transferred in to your entity in the order they were received. Your entity must have enough capital gains to absorb the capital losses transferred in.

When you have completed step D3, transfer the amount of CYCG remaining after applying CYCL, PYNCL (4J to 4O in step D2) and capital losses transferred in to A to F in part E.

Part E: Current year capital gains after applying capital losses

In part E, show your entity's current year capital gains reduced by current year capital losses, prior year net capital losses and capital losses transferred in.

Part F: CGT discount on capital gains

In part F, apply the CGT discount.

Does your entity have a capital gain at Capital gains - discount method (B or E) in part E?

Yes

Read on.

No

Go to part G.

CGT discount

Companies are not eligible for the CGT discount unless they are life insurance companies or friendly societies that carry on life insurance business. These companies may be entitled to the CGT discount for their complying superannuation business.

Next, calculate the CGT discount that applies to the capital gains at B and E in part E. The CGT discount percentage is:

  • 331/% for complying superannuation entities, or
  • 50% for individuals and trusts.

Show the amount of the CGT discount at J and K in part F.

Show the amount of your remaining capital gains at 6A to 6F in part F.

Part G: Small business CGT concessions (other than the small business 15-year exemption)

In part G, apply the small business CGT concessions your entity is claiming. For more information about the small business CGT concessions, see the Guide to capital gains tax concessions for small business 2005–06.

Is your entity eligible for the small business CGT concessions?

Yes

Read on.

No

Go to part H.

Show:

  • the amount of your entity's small business 50% active asset reduction (SBAAR) at L to N
  • the amount of your entity's small business retirement exemption (SBRE) at O to Q, and
  • the amount of your entity's small business rollover (SBRO) at R to T.

Show the total amount of the small business CGT concessions your entity is claiming at 7A to 7D of part G.

Part H: Net capital gain calculation

In part H, show the amount of your entity's net capital gain.

Your entity's net capital gain is the amount remaining after applying any current year capital losses, net capital losses from prior years, capital losses transferred in, the CGT discount and any applicable CGT small business concessions.

Include a net capital gain as assessable income on your entity's tax return at the relevant item. See step 3.

Part I: Unapplied net capital losses carried forward to later income years

In part I, show any unapplied net capital losses your entity is carrying forward. These losses will be available to reduce any capital gains in later income years.

Does your entity have any unapplied net capital losses?

Yes

Read on.

No

You have completed the worksheet.

At H and I, show details of any capital losses that are unapplied (that is, that have not been used).

At H, show the unapplied capital losses from collectables only. This is the sum of:

  • any current year capital losses from collectables that you have not used to reduce capital gains from collectables this income year (that is, deduct 1D in step A2.1 from C4 in part A2), and
  • any prior year net capital losses from collectables that you have not used to reduce capital gains from collectables this income year (that is, deduct 2G in step A2.1 from 2C in step A2.2).

At I, show all of the other capital losses - that is, the sum of:

  • the current year capital losses that you have not used to reduce capital gains (that is, deduct H in step D1 from D in part B), and
  • the prior year net capital losses that you have not used to reduce capital gains (that is, deduct L in step D2 from 4C in step D2).

At V, show the total of the amounts at H and I.

The amounts at H and I are the unapplied net capital losses available to be carried forward and used to reduce your capital gains in later income years.

You can only use unapplied net capital losses from collectables to reduce capital gains from collectables in later income years.

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