Treasury Laws Amendment (Tax Reform No. 1) Act 2026 (49 of 2026)

Schedule 1   CGT adjustments

Part 1   Main amendments

Income Tax Assessment Act 1997

3   Section 100-50

Repeal the section, substitute:

100-50 How to work out your net capital gain or loss

1. Reduce your capital gains for the income year by your capital losses for the income year. You need to reduce certain kinds of capital gains before you can reduce other kinds of capital gains. (If the capital losses for the income year exceed the capital gains, the difference is your net capital loss. You cannot deduct a net capital loss from your assessable income.)

2. Reduce any remaining capital gains by any unapplied net capital losses for previous income years. You need to reduce certain kinds of remaining capital gains before you can reduce other kinds of remaining capital gains.

3. Apply any quarantined amount relating to using or holding residential dwellings as residential accommodation to reduce certain kinds of remaining capital gains.

4. Reduce any remaining capital gains that are discount capital gains by the discount percentage.

Note: To find out what is a discount capital gain and the discount percentage, see Division 115.

5. If you carry on a small business, apply the small business concessions in further reduction of your capital gains (whether or not the gains are discount capital gains).

Note: For the small business concessions, see Division 152.

6. Add up any remaining capital gains. The total is your net capital gain.

Note: For the rules on working out your net capital gain or loss, see Division 102.