Exemptions

Warning:

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

End of attention

A common exemption is for gains and losses from pre-CGT assets (that is, an asset you acquired before 20 September 1985).

Another important exemption is for a capital gain or capital loss you make from a CGT event relating to a dwelling that was your main residence. This rule 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).

The following capital gains and capital losses are also 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
• a capital gain from a personal use asset acquired for $10,000 or less
• any capital loss from a personal use asset
• CGT assets used solely to produce exempt income or some amounts of non-assessable non-exempt income
• a CGT asset that is your trading stock at the time of a CGT event
• shares in a pooled development fund
• compensation or damages you receive for any
  • wrong or injury you suffer in your occupation
  • 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
• a reimbursement or payment of your expenses under the General Practice Rural Incentives Program or the Sydney Aircraft Noise Insulation Project
• a reimbursement or payment made under the M4/M5 Cashback Scheme
• 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
• all payments made under the German Forced Labour Compensation Programme (GFLCP) – including to a relative or heir of the victim (refer to Class Ruling CR 2002/59 Income tax: Compensation payments for Holocaust survivors and their relatives – Remembrance, Responsibility and Future Foundation)
• some types of testamentary gifts
• any capital gain or capital loss that would otherwise arise from the assignment of a right in relation to a general insurance policy held with an HIH company to the Commonwealth, the trustee of the HIH trust or a prescribed entity
• any capital gain or capital loss you make from rights being created in you or your rights ending in relation to the making of a superannuation agreement (as defined in the Family Law Act 1975), the termination or setting aside of such an agreement or such an agreement otherwise coming to an end
• any capital gain or capital loss that a complying superannuation entity makes from a CGT event happening in relation to a segregated current pension asset
• in certain circumstances, a general insurance policy, a life insurance policy or an annuity instrument
• the transfer on or after 28 December 2002 of a superannuation interest in a small superannuation fund to another small superannuation fund on the breakdown of a legal (but not a de facto) marriage
• your gain on disposal of eligible venture capital investments, if you are a qualifying investor – see Venture capital and early stage venture capital limited partnerships.

Other exemptions: capital gains

Your capital gain may be reduced if because of a CGT event, an amount has been included in your assessable income other than as a capital gain.

There are a range of concessions that allow you to disregard part or all of a capital gain made from an active asset you use in your small business.

Other exemptions: capital losses

You disregard any capital loss you make:

• from 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
• from a payment to any entity of personal services income that is included in an individual's assessable income under the alienation of personal services income provisions, or any other amount attributable to that income
• as an exempt entity.