If you made a capital gain from a CGT event that happened after 11.45am on 21 September 1999 (such as the disposal of a CGT asset), you may be able to reduce the capital gain using either or both of the following:
- the CGT discount
- one or more of the four CGT concessions available for small business.
CGT discount
If you are a company, this section does not apply to you and you cannot use the CGT discount.
If you are an individual (including a beneficiary of a trust) and
- a foreign or temporary resident, or
- an Australian resident with a period of non-residency after 8 May 2012
and you have a discount capital gain, you may not be entitled to the maximum CGT discount percentage of 50%.
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Capital gains tax (CGT) discount for foreign resident individuals
End of find out moreAll examples in this publication assume the individual (including a beneficiary of a trust) has a CGT discount of 50%.
End of attentionOtherwise, if you made a capital gain in the 2014–15 income year from a CGT asset that you acquired before 11.45am on 21 September 1999 you may choose to index the cost base (frozen at 30 September 1999) or apply the CGT discount if certain conditions are satisfied.
Where we refer to ‘after 11.45am on 21 September 1999’ we are referring to after 11.45am, by legal time in the Australian Capital Territory, on 21 September 1999.
Indexation is not available for assets acquired after 11.45am on 21 September 1999, but the CGT discount may apply if the relevant conditions are met.
The discount reduces a capital gain made by individuals (including partners in partnerships) and trusts by 50%. The discount for complying superannuation funds is 33 1/3%. Companies are ineligible for the CGT discount.
There are further rules for beneficiaries receiving trust distributions who are entitled to a share of a trust capital gain.
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'Trust distributions' in part A of the Guide to capital gains tax 2014–15 (NAT 4151)
End of find out moreYou offset capital losses against capital gains before applying the CGT discount. The CGT discount is applied before the small business CGT concessions (apart from the small business 15-year exemption as this concession provides a total exemption of a capital gain).
The main condition for the CGT discount is that you must have acquired the CGT asset at least 12 months before the CGT event giving rise to the capital gain. There are rules to prevent circumvention of the 12-month requirement. Certain CGT events, such as where new assets are created, do not qualify for the CGT discount because the 12-month rule would not be satisfied.
The CGT discount can apply to capital gains made on non-business assets, as well as business assets.