What is the cost base?



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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. 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.

For details of the CGT treatment of depreciating assets, see CGT and depreciating assets.

Last modified: 06 Oct 2009QC 27417