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How do you apply losses, concessions and the discount?

Last updated 29 March 2021

Applying capital losses

If the small business 15-year exemption applies, you do not reduce the capital gain by any capital losses before you apply that concession.

In all other cases, you apply the CGT discount and the small business concessions to the capital gain after the capital gain has been reduced by any current and prior year capital losses.

Example: Capital losses

In the same year as Lana made the $17,000 capital gain on the sale of land, she also made a capital loss of $3,000 from the sale of another asset.

She must offset the loss against the gain before applying any of the remaining concessions, as follows:

$17,000 – $3,000 = $14,000

Lana may be able to reduce her capital gain further using the CGT discount and one or more of the other small business CGT concessions.

End of example

If you have more than one capital gain, you can choose the order in which your capital gains are reduced by your capital losses.