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  • Work out which CGT methods you can use

    There are three methods for working out your capital gain. To determine which method (or methods) you can use to work out your capital gain, work through the following questions:

    1. Does the CGT event involve an asset?
      If you make a capital gain from a CGT event that creates a new asset – for example, receiving a payment for agreeing not to do something (entering into a restrictive covenant) – you can't satisfy the 12-month ownership rule so your CGT event doesn't qualify for the CGT discount.

    Yes: Go to question 2

    No: Use the ‘other’ method

    1. Have you owned the asset for less than 12 months?

    Yes: Go to question 3

    No: Go to question 6

    1. Did you acquire the asset as the legal personal representative or as a beneficiary of a deceased estate?
      (See, Deceased estates and inheritances)

    Yes: Go to question 3a

    No: Go to question 4

    1. Did the person who died acquire it before 20 September 1985?

    Yes: Go to question 3b

    No: Go to question 3c

    1. Did you dispose of the asset less than 12 months after they died?

    Yes: Use the ‘other’ method

    No: Go to question 6

    1. Did you dispose of the asset less than 12 months after the deceased person acquired it?

    Yes: Use the ‘other’ method

    No: Go to question 6

    1. Did you acquire the asset as the result of a marriage or relationship breakdown?
      (See, Relationship breakdown)

    Yes: Go to question 4a

    No: Go to question 5

    1. Did the period that your spouse owned the asset before it was transferred to you plus the period you owned the asset total less than 12 months?

    Yes: Use the ‘other’ method

    No: Go to question 6

    1. Is the asset a rollover asset?
      That is, does it replace an asset that was compulsorily acquired, lost or destroyed, disposed of as a result of a mining lease being compulsorily granted, or acquired following negotiations rather than compulsorily?
      (See, Involuntary disposal of a CGT asset)

    Yes: Go to question 5a

    No: Use the ‘other’ method

    1. Was the total period of ownership of the original asset and the replacement asset less than 12 months?

    Yes: Use the ‘other’ method

    No: Go to question 6

    1. Did you acquire the asset before 21 September 1999?

    Yes: Choose the indexation or discount method, whichever gives the better result

    No: Use the discount method

    Note: For foreign resident individuals, the 50% discount is removed or reduced on capital gains made after 8 May 2012 – see CGT discount for foreign resident individuals.

    Next steps:

    See also:

    Last modified: 28 Apr 2020QC 52168