• Step 7 Work out your total current year capital gains

    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

    Write the total of the capital gains for all your assets for the current year at H item 17 on your tax return (supplementary section), or at H item 9 if you use the tax return for retirees.

    If you had a distribution of capital gains from a managed fund, include this in your total capital gains. See step 3 in chapter C1.

    If you have any capital losses, do not deduct them from the capital gains before writing the total amount at H.

    Example 7: Total current year capital gains

    Fred does not have any other capital gains. Therefore, from step 3, he writes $875 at H item 17 on his tax return (supplementary section), or at H item 9 if he uses the tax return for retirees.

    End of example

    Step 8 Applying capital losses against capital gains

    If you do not have any capital losses from assets you disposed of this year or unapplied net capital losses from earlier years, go to step 9.

    If you made any capital losses this year, deduct them from the amount you wrote at H. If you have unapplied net capital losses from earlier years, deduct them from the amount remaining after you deduct the capital losses made this year. Deduct both types of losses in the manner that gives you the greatest benefit.

    Deducting your losses

    You will probably get the greatest benefit if you deduct capital losses from capital gains in the following order:

    1

    capital gains for which neither the indexation method nor the discount method applies (that is, if you bought and sold your shares within 12 months)

    2

    capital gains calculated using the indexation method, and then

    3

    capital gains to which the CGT discount can apply.

    Losses from collectables and personal use assets

    You can only use capital losses from collectables this year and unapplied net capital losses from collectables from earlier years to reduce capital gains from collectables. Jewellery, art and antiques are examples of collectables.

    Losses from personal use assets are disregarded. Personal use assets are assets mainly used for personal use that are not collectables - such as a boat you use for recreation. See the Guide to capital gains tax 2007 for more information.

    If the total of your capital losses for the year and unapplied net capital losses from earlier years is greater than your capital gains, go to step 11.

    Example 8: Applying a net capital loss

    Fred had a net capital loss of $75 from some shares that he sold last year and no other capital gains or capital losses this year. He can reduce this year's capital gain of $875 by $75. Fred's remaining capital gain is $800.

    End of example
    Last modified: 04 Mar 2016QC 19437