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  • Cost base

    The cost base of a capital gains tax (CGT) asset is generally the cost of the asset when you bought it, plus certain other costs associated with acquiring, holding and disposing of the asset.

    There are some CGT events where the cost base and reduced cost base are not relevant. For example, if you enter into an agreement not to work in a particular industry for a set period of time, CGT event D1 specifies that you calculate your capital gain or loss by comparing the capital proceeds with the incidental costs, which is only one element of the cost base. Also the cost base of a depreciating asset is not relevant in working out a capital gain from that asset.

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    Last modified: 01 Jul 2020QC 17161