Show download pdf controls
  • 11 Income

    G, M and A Capital gains tax questions

    This section covers:

    For most CGT events a capital gain or capital loss is the difference between what it cost the SMSF to acquire an asset and what the SMSF received when it disposed of the asset.

    An SMSF's net capital gain forms part of its assessable income.

    Generally, an SMSF can disregard any capital gain or capital loss it makes on an asset it acquired before 20 September 1985 (pre-CGT). A capital gain or capital loss that a complying SMSF makes from a CGT event for a segregated current pension asset is also disregarded.

    If the SMSF makes a capital loss, the SMSF cannot claim it against income but can use it to reduce a capital gain in the same income year. If total capital losses exceed total capital gains for the income year, the SMSF has a net capital loss. The SMSF can generally carry the net capital loss forward and deduct it against capital gains in future income years. Net capital losses are applied in the order in which they are made.

    All SMSFs that have one or more CGT events during the income year must complete a Capital gains tax (CGT) schedule and attach it to the annual return if:

    • the total current year capital gains are greater than $10,000
    • the total current year capital losses are greater than $10,000, or
    • you have chosen to apply the transitional CGT relief in 2016–17 and a realisation event occurred in 2018–19. For more information, see LCR 2016/8 Superannuation reform: transitional CGT relief for complying superannuation funds and pooled superannuation trusts.

    If you have current year capital losses, you may also need to complete a Losses schedule 2019.

    You can calculate the SMSF's net capital gain or loss using the:

    How to report a capital gain or loss in the SMSF annual return

    For information about reporting a capital gain or loss in the SMSF annual return, see the instructions for the following:

    For information about reporting a capital gain from an unsegregated current pension asset on the SMSF annual return, refer to Exempt current pension income.

    Foreign source capital gains

    An Australian super fund makes a capital gain or capital loss if a CGT event happens to any of its worldwide CGT assets.

    An SMSF that is not an Australian super fund makes a capital gain or capital loss if a CGT event happens to a CGT asset that is a taxable Australian property.

    For more information about CGT events, see Capital gains tax.

    G Did you have a capital gains tax (CGT) event during the year?

    Answer 'yes' if the SMSF:

    • had a CGT event occur during the income year
    • received a share of net income from a trust that includes a capital gain, or
    • is a subsequent participant in a forestry managed investment scheme and had a CGT event as a result of a harvest or a sale of an interest in the forestry managed investment scheme (see Appendix 2: Forestry managed investment schemes).

    No

    Print X in the No box.

    Yes

    Print X in the Yes box.

    M Have you applied a CGT exemption or rollover?

    Did the SMSF have capital gains disregarded or deferred as a result of applying a CGT exemption or rollover?

    No

    Print X in the No box.

    Yes

    Print X in the Yes box. In the code box at M, print the appropriate code from table 2.

    If the SMSF has applied more than one CGT exemption or rollover and you are using software that allows it, select all of the codes that apply.

    If you are lodging on a paper return, print the code that corresponds to the CGT exemption or rollover that resulted in the largest amount of capital gain disregarded or deferred.

    If more than one CGT exemption or roll-over applies to the largest amount of capital gain disregarded or deferred, choose the most specific rollover or exemption code that applies. For example, choose the ‘Scrip for scrip rollover (Subdivision 124-M)’ code before the more general rollover ‘Replacement asset rollovers (Division 124)’ code.

    If you have chosen to apply the transitional CGT relief in 2016–17 and a realisation event occurred in 2018–19 you must report it in the CGT schedule.

    Table 2: CGT exemptions and roll-over codes

    Code

    Description

    A

    Small business active asset reduction (Subdivision 152-C)

    B

    Small business retirement exemption (Subdivision152-D)

    C

    Small business roll-over (Subdivision 152-E)

    D

    Small business 15 year exemption (Subdivision152-B)

    E

    Foreign resident CGT exemption (Division 855)

    F

    Scrip for scrip roll-over (Subdivision 124-M)

    L

    Replacement asset roll-over (Division 124)

    M

    Exchange of shares or units (Subdivision 124-E)

    N

    Exchange of rights or options (Subdivision 124-F)

    O

    Exchange of shares in one company for shares in another company (Division 615)

    P

    Exchange of units in a unit trust for shares in a company (Division 615)

    Q

    Disposal of assets by a trust to a company (Subdivision 124-N)

    S

    Same asset roll-over (Division 126)

    U

    Early stage investor (Subdivision 360-A)

    V

    Venture capital investment (Subdivision 118-F)

    X

    Other exemptions and rollovers

    For more information about CGT exemptions and rollovers, see Capital gains tax.

    Last modified: 03 Oct 2019QC 58668