New Business Tax System (Integrity and Other Measures) Act 1999 (Incorporating amendments up to Act No. 78 of 2001) (169 of 1999)

Schedule 9   Concessions for capital gains by individuals and some other entities

Part 1   New rules

Income Tax Assessment Act 1997

3   Subsection 102-5(1)

Repeal the subsection, substitute:

(1) Your assessable income includes your net capital gain (if any) for the income year. You work out your net capital gain in this way:

Working out your net capital gain

Step 1. Reduce the *capital gains you made during the income year by the *capital losses (if any) you made during the income year.

Note 1: You choose the order in which you reduce your capital gains. You have a net capital loss for the income year if your capital losses exceed your capital gains: see section 102-10.

Note 2: Some provisions of this Act (such as Divisions 104 and 118) permit or require you to disregard certain capital gains or losses when working out your net capital gain.

Step 2. Apply any previously unapplied *net capital losses from earlier income years to reduce the amounts (if any) remaining after the reduction of *capital gains under step 1 (including any *capital gains not reduced under that step because the *capital losses were less than the total of your capital gains).

Note 1: Section 102-15 explains how to apply net capital losses.

Note 2: You choose the order in which you reduce the amounts.

Step 3. Add up the amounts of *capital gains (if any) remaining after step 2, except amounts of *discount capital gains. The sum is the non-discounted capital gain .

Note 1: Only some entities can have discount capital gains, and only if they have capital gains from CGT assets acquired at least a year before making the gains. See Division 115.

Note 2: If you do not have any amounts of discount capital gains remaining after step 2, your non-discounted capital gain is your net capital gain (so you can go straight to step 6). This will be so if you had no discount capital gains or all you had were reduced to nil in step 1 or 2.

Step 4. Reduce by the *discount percentage each amount of a *discount capital gain remaining after step 2 (if any).

Step 5. Add up each amount of a *discount capital gain remaining after step 4. The sum is the discounted capital gain .

Step 6. Add up the non-discounted capital gain and the discounted capital gain. The sum is your net capital gain for the income year.

Note: For exceptions and modifications to these rules: see section 102-30.