There is a wide range of CGT events. For more common CGT events, see Did you have a capital gains tax event in 2017–18?
Examples of other CGT events:
- an asset you owned was lost or destroyed
- you received an amount for entering into an agreement, for example, you agreed not to work in a particular industry for a set period of time
- you entered into a conservation covenant over land that you owned
- you received a non-assessable payment from a trust or company.
You may also have made a capital gain if:
- you were a beneficiary of, or had money invested in, a trust (including a managed investment fund), and
- the trust made a capital gain.
If you are not sure whether a CGT event happened in 2017–18, see 'Appendix 1: Summary of CGT events' in Guide to capital gains tax.
You cannot deduct a capital loss from your income, but in most cases it can be used to reduce any capital gain you made in 2017–18.
You may disregard some capital gains and capital losses. Generally speaking, you disregard a capital gain or capital loss on:
- assets you acquired before 20 September 1985
- cars, motorcycles and similar vehicles
- compensation you received for personal injury
- disposal of your main residence
- collectables, for example an antique or jewellery, which you acquired for $500 or less
- the exchange of shares or units you owned in a company or trust under a takeover, if certain conditions were met
- shares in a company or interests in a trust where there had been a demerger and certain conditions had been met
- disposal of an asset to which the small business 15-year exemption applies
- disposal of certain investments by
- a venture capital limited partnership
- an early stage venture capital limited partnership
- an Australian venture capital fund of funds
- disposal of shares in a pooled development fund
- personal use assets, such as boats, furniture, electrical goods and household items used or kept mainly for personal use or enjoyment. If you acquired it
- for more than $10,000, you disregard only capital losses
- for $10,000 or less, you disregard both capital gains and capital losses
- transfer of an asset where the Small business restructure roll-over is available (gains or losses are deferred until the asset is disposed of)
- shares in a qualifying early stage innovation company (ESIC) held for less than 10 years and, in the case of capital gains, the shares were also held for at least 12 months; see Tax incentives for early stage investors.
If you are a foreign resident beneficiary of a trust, and if 'managed-investment trust withholding tax' is payable on an amount that you received from that trust (other than in the capacity of a trustee), do not include any part of that amount on your tax return.
Did you dispose of shares, stapled securities or rights acquired under an employee share scheme?
Employee share schemes enable you to:
- acquire shares or stapled securities, or
- obtain rights (including options) to acquire shares or stapled securities
in your employer's company at a discount. The amount of the capital gain may be reduced if you acquired your shares, stapled securities or rights under an employee share scheme.
Did you receive, or were you entitled to receive, a share of the income of a trust or managed fund?
Managed funds (unit trusts) include property trusts, share trusts, equity trusts, growth trusts, imputation trusts and balanced trusts. Other trusts include discretionary trusts, family trusts, hybrid trusts and business trusts.
Distributions from trusts and managed funds can include two components that have CGT consequences:
- distributions of trust income where the trust's net income for tax purposes includes a net capital gain, and
- distributions of non-assessable amounts.
You need to know whether your distribution includes these amounts. To find out, check the statement (distribution, year-end or annual statement) from the trust. The statement should also show which method the trust used to calculate the capital gains included in the trust's net capital gain. There are three methods of calculating capital gains:
You must use the same method as the trust to calculate your own net capital gain.
Trustees and fund managers may use different terms to describe the calculation methods they have used and they may refer to capital gains calculated using the indexation and 'other' methods as 'non-discount gains'. If in doubt, check with your trust or fund manager.
Did you make a capital gain or capital loss on your shares?
You may make a capital gain or capital loss by selling or giving away your shares, including by selling them to the company under a share buy-back arrangement. Even if you did not pay for your shares, for example, you received them under a demutualisation, you may make a capital gain or capital loss when you sell or give them away.
If you use dividends to acquire additional shares in a company, for example, through a dividend reinvestment plan, the additional shares are subject to CGT if you sell them or give them away.
There are other ways of making a capital gain or capital loss on shares. These include:
- If you held shares in a company and during 2017–18 a liquidator or administrator declared the shares worthless, you can choose to claim a capital loss equal to the reduced cost base of the shares (otherwise you may have to wait until the company is dissolved to claim the capital loss).
- If you received a non-assessable payment (also known as a return of capital) you may have to reduce the cost base and reduced cost base of your shares. If the amount of the non-assessable payment is more than the cost base of the shares, the difference is a capital gain.
Some major share transactions took place during 2017–18 that affected Australian shareholders, see Events affecting shareholders.
Did you make a capital gain or capital loss on cryptocurrency?
A CGT event occurs when you dispose of your cryptocurrency. If you sell, trade or exchange your cryptocurrency, use it to obtain goods or services or acquired cryptocurrency as an investment and have disposed of it, you may make a capital gain or a capital loss. If the disposal is part of a business you carry on, or part of a commercial transaction that you enter into with an intention of making a profit or gain, the profits you make on the disposal will generally be assessable as ordinary income and not as a capital gain. For more information, see Tax treatment of cryptocurrencies.
Did you sell a property you inherited?
Capital gains tax applies when you dispose of CGT assets that you inherited. However, if you inherited real estate, you may not have to pay CGT if you sold it within two years of the person's death, for example, if the property was the deceased person's main residence just before they died and they were not renting any of it out or using any of it for business purposes.
Your home may be subject to capital gains tax
Under the 'main residence' exemption, you generally do not have to pay CGT on the disposal of your main residence. However, you may have to pay tax on some of your capital gain if:
- the property was not your main residence for the whole period you owned it
- you used the property, or part of it, to produce assessable income, for example, you rented it out
- the land area was greater than two hectares.
Asset transfer on marriage or relationship breakdown
If you transferred an asset to your spouse as a result of a marriage or relationship breakdown, in certain cases there are no immediate CGT consequences. In these cases there is automatic rollover (you cannot choose whether or not it applies).
However, the person who receives the asset (the transferee spouse) will usually make a capital gain or capital loss when they dispose of the asset. If you were the transferee spouse and rollover applies, you may need to get cost base information from your former spouse or their tax adviser.
Your spouse includes another person (of any sex) who:
- you were in a relationship with that was registered under a prescribed state or territory law,
- although not legally married to you, lived with you on a genuine domestic basis in a relationship as a couple.
Foreign residents who are individuals are subject to CGT on:
- direct interests in real estate located in Australia
- an interest in an entity where they and their associates hold 10% or more of the entity and the value of their interest is principally attributable to Australian real estate
- an asset they have used in carrying on a business through a permanent establishment in Australia
- an option or right to acquire one of the above.
Under the FRCGW rules, foreign residents that dispose of certain Australian assets may have an amount withheld from the sale proceeds they receive.
Similarly, Australian resident vendors could have amounts withheld from their sale proceeds if they:
- dispose of Australian real property with a market value of $750,000 or more, without providing the purchaser with an ATO-issued clearance certificate, or
- dispose of an indirect Australian real property interest without providing the purchaser with a valid vendor declaration (resident).
If you have had amounts withheld from you during the year you are entitled to claim a credit for those amounts paid to the Commissioner by the withholder.
Temporary residents are subject to CGT in the same way as foreign residents.
See Tax-free income for temporary residents in Amounts that you do not pay tax on for the definition of a temporary resident and details of the exemption.
There are special rules for shares and rights acquired under an employee share scheme.
See alsoThese myTax 2018 instructions are about capital gains tax events, capital gains (income) and capital losses.