Capital Gains Tax

Capital Gains Tax (CGT) is the tax to pay on any capital gain you make and include on your annual income tax return. CGT is not a separate tax, rather it is a component of your income tax. You are taxed on net capital gain at your marginal tax rate.

The Gain or Capital Loss worksheet helps you to calculate a capital gain or loss for each separate CGT event. Each CGT asset that resulted in a CGT event needs to be organised under one of the following categories:

  • Real estate;
  • Other CGT assets (including personal use assets) and any other CGT events; and
  • Collectables.

If a capital gain is made, it can be calculated using:

  • The Indexation method for capital gains made on CGT assets acquired before 21 September 1999 and owned for at least 12 months, or
  • The Discount method for assets owned for at least 12 months and for which you are not using the indexation method; or
  • The 'Other' method (if neither the indexation method nor the discount method applies

These three methods of calculating a capital gain are explained in full in the Guide to Capital Gains Tax.

A capital gain is transferred to the CGT summary worksheet according to the method you used to calculate it and the type of asset that gave rise to it. This worksheet is used to calculate your entity's net capital gain or net capital loss for the income year.

There are four CGT small business concessions that may apply to capital gains from active assets. These concessions are explained in the Guide to Capital Gains Tax Concessions for small business.

If the total capital gains or capital losses of your entity exceed $10,000 for the current year, then a CGT schedule needs to be completed. The Guide to Capital Gains Tax explains how to complete the CGT schedule.

For further information about CGT please see the Capital Gains Tax section and the Guide to Capital Gains Tax on the ATO website.