Personal investors guide to capital gains tax 2004

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About this guide

The Personal investors guide to capital gains tax 2003-04 explains the capital gains tax consequences of:

• the sale or gift (or other disposal) of shares or units
• the receipt of distributions of capital gains from managed funds, and
• the receipt of non-assessable payments from companies or managed funds.

Who should use this guide?

Use this guide if you are a personal investor who has made a capital gain or capital loss from shares, units or managed funds in 2003-04.

It will help you to complete:

• item 17 Capital gains on your 2004 tax return for individuals (supplementary section), or
• item 9 Capital gains if you use the 2004 tax return for retirees . Note : You cannot use the 2004 tax return for retirees if you had a distribution from a managed fund during the year.

If you sold or otherwise disposed of shares or units in a unit trust (including a managed fund) in 2003-04, read part A of this guide , then work through part B .

If you received a distribution of a capital gain from a managed fund in 2003-04, read part A of this guide , then work through part C Managed funds include property trusts, share trusts, equity trusts, growth trusts, imputation trusts and balanced trusts.

Who should NOT use this guide?

Do not use this guide if you are an investor who is not a resident of Australia or if you have gains or losses included as part of your income under other provisions of the tax law - for example, if you are a share trader.

The guide does not explain more complex issues relating to shares (including employee shares), convertible notes and units. Nor does it apply to shares and units owned by companies, trusts and superannuation funds.

Also, this guide does not cover your capital gains tax consequences when you sell other assets such as:

• a rental property
• collectables (for example, jewellery, art, antiques and collections), and
• assets for personal use (for example, a boat you use for recreation).

For these, see the Guide to capital gains tax .

Introduction

Small business concessions

If you are involved in the sale of shares or units in relation to a small business, you may wish to get the publication Guide to capital gains tax concessions for small business .

Investments in foreign hybrids

If you have an investment in a foreign hybrid, the Government has introduced Bills into Parliament which will change the tax treatment from 1 July 2003 or optionally from 1 July 2002. A foreign hybrid is an entity that was taxed in Australia as a company but taxed overseas as a partnership. When the change becomes law more information will be available on our website at www.ato.gov.au

General value shifting regime (GVSR)

If you own shares in a company or units (or other fixed interests) in a trust and value has been shifted in or out of your shares or units, you may be affected by value shifting rules. Generally, the rules only affect individuals who control the company or trust, or individuals who are related to individuals or entities that control the company or trust.

For more information, see the publication General value shifting regime in brief .

New terms

We may use some terms that are not familiar to you. These words are explained in Explanation of terms .

If this guide does not fully cover your circumstances, please:

• visit our website at www.ato.gov.au
• get either of the publications Guide to capital gains tax or You and your shares
• contact the Tax Office, or
• seek advice from a recognised tax adviser.

ATO references:
NO NAT 4152