If more than one CGT event could apply to your transaction or circumstances, the most relevant CGT event applies.
Time of the CGT event
The timing of a CGT event is important because it determines in which income year you report your capital gain or capital loss.
If you dispose of a CGT asset to someone else, the CGT event happens when you enter into the contract for disposal. If there is no contract, the CGT event generally happens when you stop being the asset's owner.
Example – Contract
In June 2004, Sue enters into a contract to sell land. The contract is settled in October 2004.
Sue makes the capital gain in the 2003–04 income year (the year she enters into the contract), not the 2004–05 income year (the year settlement takes place).End of example
If a CGT asset you own is lost or destroyed, the CGT event happens when you first receive compensation for the loss or destruction. If you do not receive any compensation, the CGT event happens when the loss is discovered or the destruction occurred.
Example – Insurance policy
Laurie owned a rental property that was destroyed by fire in June 2003. He received a payment under an insurance policy in October 2003. The CGT event happened in October 2003.End of example
The CGT events relating to shares and units, and the times of the events, are dealt with in chapter 5.