• Working out your net capital gain or loss

    Once you've worked out your capital gain or capital loss for each CGT asset, you need to work out your net capital gain or net capital loss for the year. This is the amount that goes on your income tax return.

    There are rules to ensure you are not taxed twice. For example, if you make a profit on the sale of land and you're required to include it in your assessable income as ordinary income, you don’t also include that profit as a capital gain.

    Net capital gain

    Your net capital gain is:

    your total capital gains for the year (including those distributed by a managed fund or trust)

    minus

    your total capital losses (including any net capital losses from previous years)

    minus

    any CGT discount and small business CGT concessions you're entitled to.

    See also:

    Net capital loss

    If your total capital losses for the year exceed your total capital gains, your net capital loss is:

    your total capital losses (including any net capital losses from previous years)

    minus

    your total capital gains for the year (including those distributed by a managed fund or trust).

    You can't deduct a net capital loss directly from your income, but you can carry it forward and deduct it from capital gains in later income years.

    There is no time limit on how long you can carry forward a net capital loss.

    You must offset your capital losses against your capital gains in the order in which you made them. You can't choose not to offset capital losses against capital gains if you have them, but you can choose which capital gains to deduct your losses from.

    Net losses from collectables can only be deducted from capital gains made from collectables, not from other capital gains.

    There are some capital losses you must disregard.

    Company losses

    Your company is entitled to deduct net capital losses from current year capital gains as long as it has either:

    • substantially maintained the same ownership and control, or
    • carried on the same business.

    See also

    Trust losses

    Capital losses made by a trust can't be distributed to the trust’s beneficiaries. They can be carried forward and applied against capital gains in future years.

    Capital losses you must disregard

    You must disregard any capital loss you make:

    • from a personal use asset
    • from exempt assets such as cars and motorcycles
    • from some collectables
    • from a lease (whether the result of expiry, forfeiture, surrender or assignment) unless it is used solely or mainly for producing assessable income, such as a lease on a commercial rental property or a car
    • from paying personal services income if the income is included in an individual's assessable income under the alienation of personal services income provisions, or any other amount attributable to that income
    • as an exempt (from income tax) entity – this rule ensures that if the status of an exempt entity changes and it becomes taxable, its losses are not carried forward to become deductible from assessable capital gains.
    Last modified: 18 Feb 2016QC 22161