Guide to capital gains tax 2001
This version is no longer current. Please follow this link to view the current version. |
-
This document has changed over time. View its history.
Appendices
Appendix 1: Consumer Price Index (CPI) figures
All groups - weighted average of eight capital cities | ||||
Quarter ending | ||||
Year | 31 March | 30 June | 30 Sep | 31 Dec |
1985 | - | - | 71.3 | 72.7 |
1986 | 74.4 | 75.6 | 77.6 | 79.8 |
1987 | 81.4 | 82.6 | 84.0 | 85.5 |
1988 | 87.0 | 88.5 | 90.2 | 92.0 |
1989 | 92.9 | 95.2 | 97.4 | 99.2 |
1990 | 100.9 | 102.5 | 103.3 | 106.0 |
1991 | 105.8 | 106.0 | 106.6 | 107.6 |
1992 | 107.6 | 107.3 | 107.4 | 107.9 |
1993 | 108.9 | 109.3 | 109.8 | 110.0 |
1994 | 110.4 | 111.2 | 111.9 | 112.8 |
1995 | 114.7 | 116.2 | 117.6 | 118.5 |
1996 | 119.0 | 119.8 | 120.1 | 120.3 |
1997 | 120.5 | 120.2 | 119.7 | 120.0 |
1998 | 120.3 | 121.0 | 121.3 | 121.9 |
1999 | 121.8 | 122.3 | 123.4 | N/ A |
Appendix 2: Recent share transactions
Appendix 3: Summary of CGT events
Disposal
CGT event | Time of event | Capital gain | Capital loss | |
A1 | Disposal of a CGT asset | when the disposal contract is entered into or, if none, when the entity stops being the asset's owner | capital proceeds from disposal less asset's cost bas | asset's reduced cost base less capital proceeds |
Hire purchase and similar agreements
CGT event | Time of event | Capital gain | Capital loss | |
B1 | Use and enjoyment before title passes | when use of the CGT asset passes | capital proceeds less the asset's cost basee | asset's reduced cost base less capital proceeds |
End of a CGT asset
CGT event | Time of event | Capital gain | Capital loss | |
C1 | Loss or destruction of a CGT asset | when compensation is first received or, if none, when the loss is discovered or destruction occurred | capital proceeds less the asset's cost base | asset's reduced cost base less capital proceeds |
C2 | Cancellation, surrender and similar endings | when the contract ending an asset is entered into or, if none, when an asset ends | capital proceeds from the ending less asset's cost base | asset's reduced cost base less capital proceeds |
C3 | End of an option to acquire shares and so on | when the option ends | capital proceeds from granting the option less expenditure in granting it | expenditure in granting the option less capital proceeds |
Bringing a CGT asset into existence
CGT event | Time of event | Capital gain | Capital loss | |
D1 | Creating contractual or other rights | when the contract is entered into or the right is created | capital proceeds from creating the right less incidental costs of creating the right | incidental costs of creating the right less capital proceeds |
D2 | Granting an option | when the option is granted | capital proceeds from the grant less expenditure to grant it | expenditure to grant the option less capital proceeds |
D3 | Granting a right to income from mining | when the contract is entered into or, if none, when the right is granted | capital proceeds from the grant of right less the expenditure to grant it | expenditure to grant the right less capital proceeds |
Trusts
CGT event | Time of event | Capital gain | Capital loss | |
E1 | Creating a trust over a CGT asset | when the trust is created | capital proceeds from creating the trust less the asset's cost base | asset's reduced cost base less capital proceeds |
E2 | Transferring a CGT asset to a trust | when the asset is transferred | asset's reduced cost base less capital proceeds | capital proceeds from the transfer less the asset's cost base |
E3 | Converting a trust to a unit trust | when the trust is converted | market value of the asset at that time less its cost base | asset's reduced cost base less that market value |
E4 | Capital payment for trust interest | when the trustee makes the payment | non-assessable part of the payment less the cost base of the trust interest | no capital loss |
E5 | Beneficiary becoming entitled to a trust asset | when the beneficiary becomes absolutely entitled | for a trustee - market value of the CGT asset at that time less its cost base; for a beneficiary - that market value less the cost base of the beneficiary's capital interest | for a trustee - reduced cost base of the CGT asset at that time less that market value; for a beneficiary - reduced cost base of the beneficiary's capital interest less that market value |
E6 | Disposal to a beneficiary to end an income right | the time of the disposal | for a trustee - market value of the CGT asset at that time less its cost base; for a beneficiary - that market value less the cost base of the beneficiary's right to income | for a trustee - reduced cost base of the CGT asset at that time less that market value; for a beneficiary - reduced cost base of the beneficiary's right to income less that market value |
E7 | Disposal to a beneficiary to end capital interest | the time of the disposal | for a trustee - market value of the CGT asset at that time less its cost base; for a beneficiary - that market value less the cost base of the beneficiary's capital interest | for a trustee - reduced cost base of the CGT asset at that time less that market value; for a beneficiary - reduced cost base of the beneficiary's capital interest less that market value |
E8 | Disposal by a beneficiary of capital interest | when the disposal contract is entered into or, if none, when the beneficiary ceases to own the CGT asset | capital proceeds less the appropriate proportion of the trust's net assets | appropriate proportion of the trust's net assets less the capital proceeds |
E9 | Creating a trust over future property | when the entity makes an agreement | market value of the property (as if it existed when the agreement was made) less incidental costs in making the agreement | incidental costs in making the agreement less the market value of the property (as if it existed when the agreement was made) |
Leases
CGT event | Time of event | Capital gain | Capital loss | |
F1 | Granting a long term lease | for granting a lease - when the entity enters into the lease contract or, if none, at the start of the lease; for a lease renewal or extension - at the start of the renewal or extension | capital proceeds less the expenditure on grant, renewal or extension | expenditure on grant, renewal or extension less capital proceeds |
F2 | Granting a long term lease | for granting a lease - when the lessor grants the lease; for a lease renewal or extension - at the start of the renewal or extension | capital proceeds from the grant, renewal or extension less the cost base of the leased property | reduced cost base of the leased property less the capital proceeds from the grant, renewal or extension |
F3 | Lessor pays lessee to get lease changed | when the lease term is varied or waived | no capital gain | amount of expenditure to get lessee's agreement |
F4 | Lessee receives payment for changing a lease | when the lease term is varied or waived | capital proceeds less the cost base of lease | no capital loss |
F5 | Lessor receives payment for changing a lease | when the lease term is varied or waived s | capital proceeds less expenditure in relation to variation or waiver | expenditure in relation to variation or waiver less capital proceed |
Shares
CGT event | Time of event | Capital gain | Capital loss | |
G1 | Capital payment for shares | when the company pays a non-assessable amount | payment less cost base of shares | no capital loss |
G2 | Shifts in share values | when the shift happens | the decrease in the shares market value (so far as it has shifted into certain other shares) less the corresponding proportion of the shares' cost base | no capital loss |
G3 | Liquidator declares shares worthless | when the liquidator makes the declaration | no capital gain | shares' reduced cost base |
Special capital receipts
CGT event | Time of event | Capital gain | Capital loss | |
H1 | Forfeiture of a deposit | when the deposit is forfeited | deposit less expenditure in connection with the prospective sale | expenditure in connection with the prospective sale less deposit |
H2 | Receipt for an event relating to a CGT asset | when the act, transaction or event occurred | capital proceeds less the incidental costs | incidental costs less capital proceeds |
Cessation of residency
CGT event | Time of event | Capital gain | Capital loss | |
I1 | Individual or company stops being a resident | when the individual or company stops being an Australian resident | for each CGT asset the person owns, its market value less its cost base | for each CGT asset the person owns, its reduced cost base less its market value |
I2 | Trust stops being a resident trust | when the trust ceases to be a resident trust for CGT purposes | for each CGT asset the trustee owns, its market value less its cost base | for each CGT asset the trustee owns, its reduced cost base less its market value |
Reversal of roll-over
CGT event | Time of event | Capital gain | Capital loss | |
J1 | Company stops being a member of a wholly owned group after a roll-over | when the company stops | market value of the asset at the time of the event less its cost base | reduced cost base of the asset less that market value |
J2 | Change in status of a CGT asset that was a replacement asset in a roll-over under Subdivision 152-E | when the change in status happens | the amount of the capital gain that you disregarded under Subdivision 152-E | no capital loss |
J3 | A change happens in circumstances where a share in a company or an interest in a trust was a replacement asset in a roll-over under Subdivision 152-E | when the change in circumstances happens | the amount of the capital gain that you disregarded under Subdivision 152-E | no capital loss |
Other CGT events
CGT event | Time of event | Capital gain | Capital loss | |
K1 | Partial realisation of an intellectual property right | when a contract is entered into or, if none, when partial realisation happens | capital proceeds from partial realisation less the cost base of the item of intellectual property | no capital loss |
K2 | Bankrupt pays an amount in relation to debt | when payment is made | no capital gain | that part of the payment that relates to the denied part of a net capital loss |
K3 | Asset passing to a tax-advantaged entity | when an individual dies | market value of the asset at death less its cost base | reduced cost base of the asset less that market value |
K4 | CGT asset starts being trading stock | when the asset starts being trading stock | market value of asset less its cost base | reduced cost base of asset less its market value |
K5 | Special capital loss from a collectable that has fallen in market value | when CGT event A1, C2 or E8 happens to shares in the company, or an interest in the trust, that owns the collectable | no capital gain | market value of the shares or interest (as if the collectable had not fallen in market value) less the capital proceeds from CGT event A1, C2 or E8 |
K6 | Pre-CGT shares or trust interest | when another CGT event involving the shares or interest happens | capital proceeds from the shares or trust interest that are attributable to a post-CGT asset owned by the company or trust, less the assets' cost bases | no capital loss |
Appendix 4: Flowcharts
Flowchart 1 Treatment of bonus shares issued on or after 20 September 1985
Download a copy of flowchart 1 here.
Flowchart 2: Treatment of bonus units issued on or after 20 September 1985
Download a copy of flowchart 2 here .
Flowchart 3: Treatment of rights or options to acquire shares or units issued directly to you from a company or trust for no payment
Download a copy of flowchart 3 here .
Flowchart 4: Treatment of rights or options to acquire shares or units issued that you paid to acquire from a company or trust or from another person
Download a copy of flowchart 4 here .
Appendix 5: Example of sale of a rental property
In his own right, Brett purchases a run down rental property on 1 July 1997. The price he paid was $150 000 plus $20 000 in total for stamp duty and solicitors fees.
He rents out the property after spending $2500 on initial repairs.
In the next few years, Brett incurred the following expenses on the property:
$ | |
Interest on money borrowed | 10 000 |
Rates and land tax | 8 000 |
Repairs | 15 000 |
33 000 |
As it was an old property, there was no special building write-off Brett could claim.
When Brett decided to sell the property, a real estate agent advised him that if he spent around $30 000 on major structural repairs, the property would be valued at around $500 000. He had the repairs done and put the property on the market. On 1 April 2001 he sold the property for $500 000.
Brett's real estate agents fees and solicitors fees upon the sale of the property totalled $12 500.
As this is Brett's only capital gain for this year - and he has no capital losses to offset from this year or previous years - he works out his cost base as follows:
$ | |
Purchase price of property | 150 000 |
Stamp duty and solicitors fees on purchase | 20 000 |
Capital expenditure (initial repairs) | 2 500 |
Capital expenditure (major structural repairs) | 30 000 |
Real estate agents fees and solicitors fees | 12 500 |
215 000 |
Brett deducts his cost base (expenses) from his capital proceeds (sale price).
$ | |
Proceeds from selling the house | 500 000 |
Cost base unindexed | 215 000 |
285 000 |
Brett shows $285 000 at label H - Total current year capital gains in item 17.
He decides the discount method will give him the best result, so uses this method to calculate his capital gain.
$285 000 x 50% = $142 500
Brett shows $142 500 at label A item 17.
ATO references:
NO NAT 4151
Date: | Version: | |
You are here | 1 July 2000 | Original document |
1 July 2001 | Updated document | |
1 July 2002 | Updated document | |
1 July 2003 | Updated document | |
1 July 2004 | Updated document | |
1 July 2005 | Updated document | |
1 July 2006 | Updated document | |
1 July 2007 | Updated document | |
1 July 2008 | Updated document | |
1 July 2009 | Updated document | |
1 July 2010 | Updated document | |
1 July 2011 | Updated document | |
1 July 2012 | Updated document | |
1 July 2013 | Updated document | |
1 July 2014 | Updated document | |
1 July 2015 | Updated document | |
1 July 2016 | Updated document | |
1 July 2017 | Updated document | |
1 July 2018 | Updated document | |
1 July 2019 | Updated document | |
1 July 2020 | Updated document | |
1 July 2021 | Updated document | |
1 July 2022 | Updated document | |
1 July 2023 | Current document |