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Capital gains tax
Some capital gains are exempt (that is, you don't include them in your assessable income) and some capital losses you must disregard (that is, you can't use them to offset a capital gain and therefore reduce your assessable income).
Exemptions include capital gains or capital losses for:
A capital gain or capital loss you make on your ‘main residence’ (your home) is generally exempt. However, the exemption depends on how you came to own the dwelling and whether you've used it to produce income, such as by renting out all or part of it (see Selling your home).
Collectables include the following items used or kept mainly for the personal use or enjoyment of you or your associates:
A collectable is also:
You disregard any capital gain or capital loss you make from a collectable if any of the following apply:
If you dispose of individual collectables that you would usually dispose of as a set, you are exempt from paying CGT only if you acquired the set for $500 or less on or after 16 December 1995.
Capital losses from collectables can be used only to reduce capital gains (including future capital gains) from collectables. As is the case with any capital loss, there is no time limit on how long you can carry forward a net capital loss from a collectable.
Personal use assets are CGT assets, other than collectables, used or kept mainly for the personal use or enjoyment of you or your associates. Any personal use asset you acquired for less than $10,000 is disregarded for CGT purposes.
Personal use assets include:
A personal use asset is also:
Assets that are not considered to be personal use assets include:
If you dispose of personal use assets individually that would usually be sold as a set, you get the exemption only if you acquired the set for $10,000 or less.
All capital losses you make on personal use assets are disregarded. This means you can't use capital losses on personal use assets to reduce your capital gains on other personal use assets.
CGT does not apply to most depreciating assets you use solely for taxable purposes (such as business equipment or items in a rental property). Gains (or losses) made on these assets are treated as assessable income (or claimed as deductions) unless the assets were part of a depreciation pool. However, if you've used a depreciating asset for a non-taxable purpose (for private purposes, for example) CGT may apply.
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