• Exemptions and roll-overs

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    This information may not apply to the current year. Check the content carefully to ensure it is applicable to your circumstances.

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    There may be exemptions or roll-overs that allow you to reduce, defer or disregard your capital gain or capital loss. The most common exemption is if you dispose of an asset you acquired before 20 September 1985.

    Exemptions

    The exemptions listed below allow you to reduce or disregard a capital gain or capital loss you make from certain CGT events.

    General exemptions

    A capital gain or capital loss you make from any of the following is disregarded:

    • a car (that is, a motor vehicle designed to carry a load of less than one tonne and fewer than nine passengers) or motor cycle or similar vehicle
    • a decoration awarded for valour or brave conduct, unless you paid money or gave any other property for it
    • collectables acquired for $500 or less and personal use assets acquired for $10 000 or less
    • CGT assets used solely to produce exempt income
    • shares in a Pooled Development Fund
    • use of a GST Direct Assistance Certificate of up to $200 value
    • compensation or damages you receive for any wrong or injury you suffer in your occupation
    • compensation or damages you receive for any wrong, injury or illness you or your relatives suffer
    • compensation you receive under the firearms surrender arrangements
    • winnings or losses from gambling, a game or a competition with prizes
    • an amount you receive as reimbursement or payment of your expenses under the General Practice Rural Incentives Program or the Sydney Aircraft Noise Insulation Project
    • a CGT asset that is your trading stock at the time of a CGT event
    • a re-establishment grant made under section 52A of the Farm Household Support Act 1992
    • a dairy exit payment under the Farm Household Support Act 1992
    • a reimbursement or payment made under the M4/ M5 Cashback Scheme
    • some types of testamentary gifts, or
    • plant (if the CGT event occurs after 11.45am on 21 September 1999).

    Other exemptions

    Any capital gain you make may be reduced if, because of a CGT event, an amount has been included in your assessable income other than as a capital gain. Any capital loss you make from the following is disregarded:

    • the expiry, forfeiture, surrender or assignment of a lease if the lease is not used solely or mainly for the purpose of producing assessable income, and
    • a payment to an entity of alienated personal services income that is included in an individual's assessable income (or any other amount attributable to that income).

    A capital loss made by an exempt entity is also disregarded.

    Specific exemption - main residence

    You can ignore a capital gain or capital loss you make from a CGT event relating to a dwelling that was your main residence. This can change, however, depending on how you came to own the dwelling and what you have done with it, for example, if you rented it out (see chapter 6 for more information).

    Roll-overs

    Roll-over allows a capital gain or capital loss to be deferred or disregarded until a later CGT event happens to the asset. While there are several types of roll-over available, only three are covered in this guide.

    Marriage breakdown

    When an asset is transferred from one spouse to another after their marriage breakdown, any capital gains tax is deferred until a later CGT event happens (for example, when the former spouse sells the asset to someone else). For more examples of how CGT obligations are affected by marriage breakdown, see chapter 8.

    Loss, destruction or compulsory acquisition of an asset

    You may disregard a capital gain if a CGT asset has been lost or destroyed or is compulsorily acquired (see chapter 7).

    Scrip for scrip

    You may also be able to defer a capital gain if you dispose of your shares in a company-or interest in a trust-as a result of a takeover (see chapter 5).

    Last modified: 31 Aug 2010QC 16195