Record keeping for CGT

You must keep records of every transaction, event or circumstance that may be relevant to working out whether you've made a capital gain or capital loss from a CGT event. Penalties can apply if you don't keep the records for at least five years after the event.

Keeping adequate records will help you work out your capital gain or capital loss correctly when a CGT event happens.

Good records can also help your beneficiaries deal with the impact of CGT. If you leave an asset to another person, it may be subject to CGT as a result of a future CGT event. For example, if your daughter sells shares you've left her in your will, she will need your records to determine her cost base for the shares and therefore how much CGT she will have to pay.

You should also keep records relating to a net capital loss in a year, which you may be able to offset against a capital gain in a later year. (And there is no time limit on how long you can carry forward a net capital loss.)

Once you've offset the loss against a capital gain, you should generally keep your records of the CGT event that resulted in the loss until the end of the period of review for the income year in which the net capital loss is fully offset.

Your records

Your records must be in English (or be readily accessible in or translatable to English) and must show:

  • the nature of the transaction, event or circumstances
  • the date it happened
  • the parties to the transaction, and
  • how the transaction, event or circumstances are relevant to working out the capital gain or capital loss.

These are the kind of records you'll need to keep:

  • receipts of purchase or transfer
  • details of interest on money you borrowed relating to this asset
  • records of agent, accountant, legal and advertising costs
  • receipts for insurance costs, rates and land taxes
  • any market valuations
  • receipts for the cost of maintenance, repairs and modifications
  • accounts showing brokerage fees on shares.

You should also keep records to establish whether you've claimed an income tax deduction for an item of expenditure. If you've claimed a deduction for an amount, you can’t also include the amount in the cost base of a CGT asset.

You don't need to keep records for a capital gain or capital loss that is disregarded unless it is disregarded because of a rollover.

It’s never too late

If you acquired assets after CGT started (that is, after 19 September 1985) and didn't keep records, or they have inadvertently been destroyed, you can still do something about it.

If you bought real estate, your solicitor or estate agent may be able to give you copies of most of the records you need.

If you made improvements to an investment property – for example, if you built an extension – ask the builder for a copy of the receipt for payment.

If you bought shares in a company or units in a unit trust, your stockbroker or investment adviser may be able to give you the information you need.

If you received an asset as a gift and didn't get a market valuation at the time, a professional valuer can tell you what its market value was at the relevant date.

If you lost your records in a natural disaster, we can help you reconstruct them.

The main thing is to get as many details as possible so you can reconstruct your records.

See also:

Last modified: 17 Feb 2016QC 22151