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Capital gains tax
There are some capital gains you can disregard (that is, you do not have to 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).
Some of the more common exemptions include capital gains or capital losses for:
A capital gain or capital loss you make from a CGT event relating to a dwelling that was your ‘main residence’ (your home) is generally exempt. However, the exemption depends on how you came to own the dwelling and what you have done with it – for example, whether you have rented it out at any time, including having a lodger (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 cannot use capital losses on personal use assets to reduce your capital gains on other personal use assets.
CGT does not apply to depreciating assets you use solely for taxable purposes. Gains (or losses) made on these assets are treated as assessable income (or claimed as deductions). Such assets may include business equipment or fittings in a rental property. However, if you have used a depreciating asset for a non-taxable purpose (for example, used it for private purposes) the CGT rules apply.
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