Introduction

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

The instructions in this part are designed to help companies, trusts and funds (your entity) to calculate a capital gain or capital loss and to complete the capital gains items on the relevant tax return:

• Company tax return 2007 - item 7
• Trust tax return 2007 - item 18, or
• Fund income tax and regulatory return 2007 - item 9a.

Funds include superannuation funds, approved deposit funds and pooled superannuation trusts.

The labels to complete at these items on your entity's tax return are:

• G Did you have a CGT event during the year?
• A Net capital gain

You will also need to complete V Net capital losses carried forward to later income years at the Losses information item on your entity's tax return.

The relevant item number on each tax return is:

• Company tax return 2007 - item 11
• Trust tax return 2007 - item 24
• Fund income tax and regulatory return 2007 - item 10.

New terms

We may use some terms that are new to you. These words are explained in Definitions. Generally, they are also explained in detail in the section where they first appear.

Entity

The term 'entity' is used to describe a company (including a head company of a consolidated group), a trust and a fund in this part of the guide.

Worksheets

The worksheets provided at the back of this guide are the:

• Capital gain or capital loss worksheet (PDF 58KB)This link will download a file (to calculate the capital gain or capital loss from each CGT event)
• CGT summary worksheet for 2006-07 tax returns (PDF 182KB)This link will download a file (to calculate the net capital gain for the 2006-07 income year or net capital losses carried forward to later income years and to complete the CGT labels on the 2007 tax return).

You can tear out the worksheets and complete them as you work through this part.

The worksheets are optional and your entity may prefer to use a different worksheet or a computer-based alternative. We have used these worksheets throughout this part of the guide as examples to help you complete the capital gains item on your entity's tax return, and a CGT schedule 2007 if this is required.

CGT schedule

Your entity must complete this schedule for the 2006-07 income year if the:

• total current year capital gains are greater than $10,000, or
• total current year capital losses are greater than $10,000.

If your entity is required to complete a CGT schedule 2007, you must attach it to your entity's 2007 tax return.

In the worksheets and CGT schedule at the back of this guide, 'current year capital gain' (CYCG), 'current year capital losses' (CYCL) and 'prior year net capital losses' (PYNCL) refer to 'current income year' and 'prior income year'.

Consolidated groups

If a group consolidates during the income year, the head company must lodge a CGT schedule if the total capital gains or total capital losses that it makes - as head company of the consolidated group and while not a member of a consolidated group - are greater than $10,000.

An entity that has joined a consolidated group or groups during the year of income as a subsidiary member must lodge a CGT schedule covering any periods of non-membership if the entity satisfies the requirements for lodgment of that schedule.

Detailed information on the operation of consolidation is available on our website or phone the Tax Reform Infoline on 13 24 78.