Part C – Instructions for companies, trusts and funds (entities)

Foreign resident capital gains withholding payments

The foreign resident capital gains withholding regime can apply in the 2016 income year to foreign residents with a 2016 income tax year ending after 30 June 2016, in relation to contracts entered into on or after 1 July 2016. Where a foreign resident entered a contract to dispose of taxable Australian property on or after 1 July 2016, and the purchaser withheld such amounts, the foreign resident is entitled to claim a credit in their tax return when this amount has been paid. The ATO will advise the foreign resident of receipt of the withholding from the purchaser. For 2016, there is no place on the tax return form for the foreign resident can claim the credit for the foreign resident withholding that has been paid.

To claim the credit:

• On a separate sheet of paper, provide details from the confirmation receipt you received from the ATO showing that the foreign resident capital gains withholding has been paid.
• Write 'Attachment" at the top of your tax return.
• Send the attachment with your tax return form.

Look-through earnout rights and amendment to your earlier year income tax assessment

If you received or provided a financial benefit under a look-through earnout right created on or after 24 April 2015 you may need to seek an amendment to your income tax assessment for the year in which the relevant CGT occurred. You may be able to request such amendment via the CGT Schedule (if you satisfy the relevant conditions) when you lodge your current year income tax return. Detailed instructions are provided in Item 7 Earnouts arrangements under Part C.

Are you an individual?

If you are completing a tax return on behalf of an individual (rather than an entity) and you do not wish to use the worksheets, read part B.

If you need help completing the:

• Capital gain or capital loss worksheet (PDF, 127KB), read step 1 of this part (ignoring the word ‘entity’)
• CGT summary worksheet 2016 (PDF, 166KB), read steps 2 and 3 in this part.

Is your entity a company, trust or fund?

Read this part.

Do you expect your entity’s total capital gains or total capital losses for the 2015–16 income year to be $10,000 or less?

An Attribution Managed Investment Trust (AMIT) with multiple classes must apply the $10,000 total capital gain or loss threshold to each class separately.

Yes	Work through steps 1 to 3.
No	Work through steps 1 to 4. Step 4 will show you how to complete the CGT schedule.

Introduction

The instructions in this part are designed to help companies, trusts and funds (your entity) to calculate a capital gain or capital loss and to complete the capital gains items on the relevant tax return:

• Company tax return 2016 item 7
• Trust tax return 2016 item 21
• Fund income tax return 2016 item 10
• Self-managed superannuation fund annual return 2016 item 11.

Funds include superannuation funds, approved deposit funds and pooled superannuation trusts.

A self-managed superannuation fund is a fund with fewer than five members that meets the requirements of section 17A of the Superannuation Industry (Supervision) Act 1993.

The labels to complete at these items on your entity’s tax return are:

• G Did you have a capital gains tax event during the year?
• M Have you applied an exemption or rollover?
• A Net capital gain

You will also need to complete V Net capital losses carried forward to later income years at Losses information on your entity’s tax return.

The relevant item number on each tax return is:

• Company tax return 2016 item 13
• Trust tax return 2016 item 27
• Fund income tax return 2016 item 13
• Self-managed superannuation fund annual return 2016 item 14.

You may need to complete a Consolidated groups losses schedule 2016 or a Losses schedule 2016. See the applicable schedule instructions for full details of who must complete the schedule.

The term ‘entity’ is used to describe a company (including a head company of a consolidated group), a trust and a fund in this part of the guide.

Worksheets

The worksheets provided in this guide are the:

• Capital gain or capital loss worksheet (PDF, 127KB) (to calculate the capital gain or capital loss from each CGT event)
• CGT summary worksheet 2016 (PDF, 166KB) for 2016 tax returns (to calculate the net capital gain for the 2015-16 income year or net capital losses carried forward to later income years and to complete the CGT labels on the 2016 tax return).

You can print out the worksheets and complete them as you work through this part.

The worksheets are optional and your entity may prefer to use a different worksheet or a computer-based alternative. We have used these worksheets throughout this part of the guide as examples to help you complete the capital gains item on your entity’s tax return, and a CGT schedule if this is required.

CGT schedule

Your entity must complete this schedule for the 2015–16 income year if the:

• total current year capital gains are greater than $10,000, or
• total current year capital losses are greater than $10,000.

If your entity is required to complete a CGT schedule, you must attach it to your entity’s 2016 tax return.

In the worksheets and CGT schedule at the back of this guide, ‘current year capital gain’ (CYCG), ‘current year capital losses’ (CYCL) and ‘prior year net capital losses’ (PYNCL) refer to ‘current income year’ and ‘prior income year’.

Consolidated groups

If a group consolidates during the income year, the head company must lodge a CGT schedule if the total capital gains or total capital losses that it makes (as head company of the consolidated group and while not a member of a consolidated group) are greater than $10,000.

An entity that has joined a consolidated group or groups during the year of income as a subsidiary member must lodge a CGT schedule covering any periods of non-membership if the entity satisfies the requirements for lodgment of that schedule.

For more information on the operation of consolidation, see Consolidation.

Attribution Managed Investment Trusts (AMIT)

If an AMIT chooses multi-class treatment, complete a separate CGT schedule for each class with a total capital gain or loss greater than $10,000.

AMITs that do not choose multi-class treatment must lodge a CGT schedule if the entity has a total capital gain or loss greater the $10,000.

Steps you need to take

The completion of the CGT labels on your entity’s 2016 tax return involves a three-step process (for entities with capital gains or capital losses under the $10,000 threshold) or a four-step process (for entities with capital gains or capital losses over the $10,000 threshold):

• Step 1 Calculate the capital gain or capital loss for each CGT event that happens during the 2015–16 income year using the Capital gain or capital loss worksheet.
• Step 2 Calculate the net capital gain for the 2015–16 income year or net capital losses carried forward to later income years using the CGT summary worksheet.
• Step 3 Complete the capital gains item on your entity’s tax return.
• Step 4 If required, complete a CGT schedule.