If you have no capital losses from assets you disposed of this year and no unapplied net capital losses from earlier years, go to step 5.
If you made any capital losses this year, deduct them from the amount you wrote at H. If you have unapplied net capital losses from earlier years, deduct them from the amount remaining after you deduct any capital losses made this year. Deduct both types of losses in the manner that gives you the greatest benefit.
Deducting your losses
You will probably get the greatest benefit if you deduct capital losses from capital gains distributed from the fund in the following order:
- capital gains calculated using the 'other' method
- capital gains calculated using the indexation method, and then
- capital gains calculated using the discount method.
If the total of your capital losses for the year and unapplied net capital losses from earlier years is greater than your capital gains for the year, go to step 7.
Example 23: Deducting capital loss
If Tim had a capital loss of $200 when he sold another CGT asset, he deducts his capital loss ($200) from his capital gain ($900) and arrives at $700. As he applied the loss first against the capital gain calculated using the 'other' method and then against the capital gain calculated using the discount method (after grossing it up), Tim can apply the CGT discount to the remaining $700.
End of exampleLosses from collectables and personal use assets
You can only use capital losses from collectables this year and unapplied net capital losses from collectables from earlier years to reduce capital gains from collectables. Jewellery, art and antiques are examples of collectables.
Losses from personal use assets are disregarded. Personal use assets are assets mainly used for personal use that are not collectables - such as a boat you use for recreation. See Guide to capital gains tax 2005–06 for more information.