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What is the cost base?

Last updated 24 February 2020

For most CGT events, the cost base of a CGT asset is important in working out if you have made a capital gain. For working out the amount of a capital loss for these events, the reduced cost base of a CGT asset is relevant.

For some CGT events, the cost base is not relevant. In these cases, the CGT event explains the amounts to use to work out your capital gain. Columns 3 and 4 in appendix 1 indicate when the cost base or reduced cost base of an asset is 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 make a capital gain or capital loss by comparing the capital proceeds with the incidental costs. Also the cost base of an asset that is a depreciating asset is not relevant in working out a capital gain from that asset.

There are special rules for calculating the cost of a depreciating asset. For details, see CGT and depreciating assets and the Guide to depreciating assets.