Guide to capital gains tax 2001

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Part C - Instructions for Companies, Trusts and Funds (Entities)

Check this signpost before you read part B or part C of this guide

Are you an individual?	Read part B of this guide, and only read part C if you need help completing the sample worksheets.
Are you a company, trust or fund?	Read part C of this guide first. The steps outlined will show you whether you need to read section 1 or section 2 or both.
Do you expect your entity's total capital gains or total capital losses for the current year to be $10 000 or less?	Work through section 1 of part C. You only need to refer to section 2 of part C if your entity's total capital gains or total capital losses are greater than $10 000 in 2000-01.
Do you expect your entity's total capital gains or total capital losses for the current year to be greater than $10 000?	Work through section 2 of part C. You will be referred back to section 1 of part C if you need help with the worksheets.

Introduction

These instructions 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 in the relevant tax return. This will be the:

• Company tax return 2001 (item 6)
• Trust tax return 2001 (item 17), or
• Fund income tax and regulatory return 2001 (item 9).

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

The labels to complete in these items are:

• label G - Did you have a CGT event during the year?
• label A - Net capital gain, and
• (if you are an individual) label H - Total current year capital gains .

You will also need to show your net capital losses carried forward to later income years at label V in the relevant item number for your entity's tax return. These are:

• Company tax return 2001 - item 8 (losses information)
• Trust tax return 2001 - item 23 (losses information), or
• Fund income tax and regulatory return 2001 - item 10 (losses information).

Note

New terms

There may be terms in part C that are not familiar to you. Refer to chapter 1 in part A or to the Explanation of terms in this guide.

Note

Entities

The term 'entities' is used to describe companies, trusts and funds in this part of the guide.

Worksheets

The steps in section 1 of part C explain how to calculate the net capital gain or net capital loss made by your entity for the 2000-01 income year.

The sample worksheets provided in this guide are the Capital gain or loss worksheet (to calculate the capital gain or capital loss from each CGT event) and the CGT summary worksheet (to calculate the net capital gain or net capital loss). You can print out the worksheets and complete them as you work through this part.

The Capital gain or loss worksheet calculates a capital gain or capital loss made by the entity for each CGT event. The CGT summary worksheet calculates the net capital gain or net capital loss made by the entity and explains how to complete the CGT labels in the 2000-01 tax return.

The worksheets in section 1 are optional and your entity may prefer to use a different worksheet or a computer-based alternative. We have used these sample worksheets throughout this part of the guide as examples to help you complete the capital gains item in your entity's tax return - and a Capital gains tax (CGT) schedule 2001 (CGT schedule) if this is required. Your entity must complete this schedule for the 2000-01 income year if:

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

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If these thresholds do not apply to your entity, go to section 1 in this part of the guide for instructions on how to complete the capital gains item in your entity's tax return using the two worksheets. If you are not sure whether these thresholds apply to your entity, section 1 should give you the information you need.

Note

Individuals

If you are an individual taxpayer, you may also use the worksheets in this guide and the related instructions in section 1 to calculate your net capital gain or net capital loss. As an individual, you are not required to complete a CGT schedule when lodging a paper return, regardless of the amount of your capital gains or capital losses.

CGT schedule

If the $10 000 threshold applies to your entity, you need to complete a Capital gains tax (CGT) schedule 2001 (CGT schedule). The CGT schedule replaces several return form labels used in past tax returns.

If your entity is required to complete a CGT schedule, you attach it to your entity's 2000-01 tax return.

Go to section 2 in this part of the guide for instructions on how to complete the capital gains item in your entity's tax return using the two worksheets and the CGT schedule.

Steps you need to take

The Capital gain or loss worksheet and the CGT summary worksheet show the steps you need to take to calculate a net capital gain or net capital loss for the 2000-01 income year and to complete the CGT labels on the 2000-01 tax return.

The instructions below form a three-step process (for entities under the threshold of $10 000 capital gains or capital losses) or a four-step process (for entities over these thresholds):

Step 1:	calculate a capital gain or capital loss for each CGT event that happens during the 2000-01 income year using the Capital gain or loss worksheet
Step 2:	calculate the net capital gain or net capital loss for the 2000-01 income year using the CGT summary worksheet
Step 3:	(if required) complete a CGT schedule, and
Step 4:	complete the capital gains item in your entity's tax return.

Step 1 - Complete a capital gain or loss worksheet for each CGT event

The Capital gain or loss worksheet calculates a capital gain or capital loss for each, separate CGT event. Do not attach completed worksheets to your entity's 2000-01 tax return - these are your working papers and should be kept with your entity's tax records.

Remember that when you are using the Capital gain or loss worksheet:

• you show the type of CGT asset or CGT event that resulted in the capital gain or capital loss. Organise each of these under one of the following four categories:
  • shares and units in unit trusts
  • real estate
  • other CGT assets (including personal use assets) and any other CGT events, or
  • collectables
• a capital gain or capital loss from plant is disregarded (see note 4 to the worksheet), and
• if a capital gain was made, you calculate it using:
  • the indexation method (see note 2 to the worksheet) for capital gains made on CGT assets acquired before a certain time (11.45am by legal time in the ACT on 21 September 1999) and owned for at least 12 months, or
  • the discount method (see note 3 to the worksheet) 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 apply).

These three methods of calculating a capital gain are explained in full in chapter 2 in part A and are also listed in the Explanation of terms in this guide.

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When you have calculated your capital gain or capital loss for each CGT event using a Capital gain or loss worksheet or a different tool, transfer any capital gains or capital losses to the CGT summary worksheet .

Step 2 - Complete the CGT summary worksheet

The CGT summary worksheet calculates the net capital gain or net capital loss for the 2000-01 income year. It also provides the information you need to complete the capital gains item in your entity's tax return and, if required, the CGT schedule.

You should include in this worksheet any capital gain your entity has received as a distribution from a trust.

The CGT summary worksheet is designed for entities that make a capital gain or capital loss during the income year. However, you may also find it useful if you are an individual (including a partner in a partnership) who has more complex capital gains tax affairs.

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Transfer the capital gain or capital loss calculated on each Capital gain or loss worksheet to the CGT summary worksheet . Transfer a capital gain according to the method you used to calculate it and the type of asset that gave rise to it.

The CGT summary worksheet differentiates between capital gains from active assets and non-active assets. Generally, an active asset is a business asset the entity owns, for example, goodwill of a business. A share and an interest in a trust can also be an active asset if certain conditions are met.

There are four CGT small business concessions that may apply to capital gains from active assets, as follows:

• the small business 15 year exemption:
  
  this exemption, subject to certain conditions being satisfied, means a capital gain is totally disregarded if your small business entity has continuously owned the CGT asset for at least 15 years, and:
  • you are 55 or over and retiring, or
  • you are permanently incapacitated
• the small business 50% active asset reduction:
  
  this concession provides a 50% reduction of a capital gain for an active asset
• the small business retirement exemption:
  
  this allows capital gains for active assets (up to a lifetime limit of $500 000) to be disregarded if the conditions are satisfied. If you are under 55 and are eligible for this exemption, the amount must be paid into a superannuation (or similar) fund, and
• the small business roll-over:
  
  this enables you to defer a capital gain if a replacement asset is acquired and other conditions are satisfied.

To find out if your business is eligible for the CGT small business concessions, obtain a copy of the publication Capital gains tax concessions for small business .

Note

Active assets

Remember that under 'active assets' in the CGT summary worksheet (and the CGT schedule), you should only include a capital gain from an active asset that qualifies for one or more of the following CGT small business concessions:

• small business 50% active asset reduction, and/ or
• small business retirement exemption, and/ or
• small business roll-over.

If the asset does not qualify for one or more of these concessions, include the capital gain under 'non-active assets'.

Note

Limit on value of assets

When you apply the CGT small business concessions, there is a limit of $5 million on the net value of assets that your business and related entities own just before the CGT event.

Note

Life insurance companies

Life insurance companies, including friendly societies that conduct life insurance business, need to complete two CGT summary worksheets - one for each class of income they derived (superannuation class and ordinary class income). Capital losses from one class of income can only be applied against capital gains from that class of income.

Step 3 (If required) - Complete a CGT schedule

Your entity must complete a CGT schedule for the 2000-01 income year if:

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

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If the $10 000 thresholds do not apply to your entity, go to section 1 in this part of the guide for instructions on how to complete the capital gains item in your entity's tax return using the two worksheets. If you are not sure whether these thresholds apply to your entity, section 1 should give you the information you need.

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If the $10 000 thresholds apply to your entity, go to section 2 in this part of the guide for instructions on how to complete the capital gains item in your entity's tax return using the two worksheets and the CGT schedule. This section will also explain how to complete this schedule.

Step 4 - Complete the capital gains item in your entity's tax return

In the earlier steps, you calculated your capital gain or capital loss for each CGT event, then worked out your net capital gain or net capital loss. If required, you then complete a CGT schedule.

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Transfer the net capital gain to label A in the capital gains item in your entity's tax return.

Section 1 Using the two worksheets

This section explains how to complete the capital gains item in your entity's tax return using the Capital gain or loss worksheet and the CGT summary worksheet. If your entity also needs to complete a CGT schedule, work through this section first, then go to section 2 for instructions on how to complete a CGT schedule.

Section 1A How to complete the Capital gain or loss worksheet

The Capital gain or loss worksheet calculates a capital gain or capital loss for each, separate CGT event. As explained under Steps you need to take , remember that:

• you show the type of CGT asset or CGT event that resulted in the capital gain or capital loss
• a capital gain or capital loss from plant is disregarded (see note 4 to the worksheet), and
• if a capital gain was made, you calculate it using:
  • -the indexation method (see note 2 to the worksheet), or
  • -the discount method (see note 3 to the worksheet), or
  • -the 'other' method (if neither the indexation method nor the discount method apply).

When choosing between the indexation and discount methods, the amounts at (a) and (b) at the bottom of the worksheet do not yet reflect any capital losses or CGT discount you may be able to apply. This affects your choice of the amount to transfer to the CGT summary worksheet which you can use to calculate your net capital gain or net capital loss.

Section 1B How to complete the CGT summary worksheet

The parts in this section relate to the parts of the CGT summary worksheet . Work through each relevant part to complete your worksheet.

PART A: Total current year capital gains

In Part A you show your entity's total current year capital gains.

Part A1: Current year capital gains (other than capital gains from collectables)

Note

What to include and exclude

Do not include any capital gain to which an exemption or exception applies, including the small business 15-year exemption.

In the active assets columns, only include capital gains for which your entity is entitled to one or more of the relevant CGT small business concessions. These are:

• small business 50% active asset reduction
• small business retirement exemption, and
• small business roll-over.

If the capital gain does not qualify for one or more of the concessions, include the capital gain at the non-active assets columns.

At A to I and M to U on the worksheet, show the current year capital gains (other than from collectables) transferred from the Capital gain or loss worksheets .

If your entity has received a distribution from a trust of a net capital gain from a CGT event other than a collectable, write this at G to I and S to U on your worksheet. If applicable, you show a grossed-up amount at H , T , S and U , as explained below.

If your entity is a beneficiary of a trust, you must use the same method as the method used by the trustee to calculate your entity's capital gain. For example, if the trustee used the discount method to calculate a capital gain, you must use the same method and show the result in the column headed Capital gains - discount method on your worksheet at H (for non-active assets) or T (for active assets).

If the trustee used the discount method to calculate a capital gain, the distribution amount would have been multiplied by the CGT discount of 50%. This means you need to gross it up by multiplying the distribution amount by two. You show the result at H . Grossing up ensures that any capital losses your entity has made are deducted from your grossed-up capital gain before the CGT discount is applied.

If the trust's capital gain was reduced only by the small business 50% active asset reduction, multiply the distribution amount by two and show the result at S or U .

If the trust's capital gain was reduced by the CGT discount and by the small business 50% active asset reduction, multiply the distribution amount by four and show the result at T .

Capital gains from personal use assets are shown at Other CGT assets and any other CGT events in Part A1 . Show the full amount of all capital gains in Part A1, not the amount remaining after applying the CGT discount or the CGT small business concessions.

All capital losses must be applied before the CGT discount and before the CGT small business concessions. Capital losses are applied on page 4 of the worksheet at Part D .

The CGT discount is applied on page 6 of the worksheet at Part F , while the CGT small business concessions are applied on page 7 at Part G .

Once you have completed Part A1 , transfer the amounts at A1 to A6 to the corresponding A1 to A6 in Part A3 of the CGT summary worksheet .

Part A2: Capital gains and capital losses from collectables

Transfer any capital gains and capital losses from collectables from the Capital gain and loss worksheets to C1 , C2 , C3 or C4 in your summary worksheet.

If you have received a distribution of a net capital gain from a trust resulting from a collectable, show this amount at C5 to C7 . If applicable, show a grossed-up amount at C6 .

If your entity is a beneficiary of a trust, you must use the same method as the trustee to calculate a capital gain. For example, if the trustee used the discount method to calculate a capital gain, you need to do the same and show that amount at C6 .

If the trustee used the discount method to calculate a capital gain, the distribution amount would have been multiplied by the CGT discount of 50%. This means you need to gross it up by multiplying the distribution amount by two. Grossing up ensures that any capital losses your entity has made are subtracted from your grossed-up capital gain before the CGT discount is applied.

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Did your entity make a capital gain or a capital loss from a collectable during the income year? Or did the entity receive a distribution from a trust during the income year that includes a net capital gain from a collectable?

Yes - read on

No - go to Part A3

Step A2.1: Deduct any current year capital losses (CYCL) from collectables from current year capital gains (CYCG) from collectables

If your entity has any current year capital losses from collectables, deduct these from any current year capital gains. This reduces your capital gains tax obligation.

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Does your entity have any current year capital gains from collectables?

No - transfer the amount at C4 to H in Part I and then go to Part A3

Yes - does your entity have any current year capital loss from a collectable?

Yes - read on

No - transfer the amounts at C8 , C9 and C10 to 1E , 1F and 1G and then go to Step A2.2

Deduct any current year capital losses from collectables (shown at C4 ) from your current year capital gains from collectables (shown at C8 to C10 ). You can do this in the order that gives you the best result, which would usually be:

1. the 'other' method, then
2. the indexation method, then
3. the discount method.

Show these amounts at 1A to 1C , depending on the method you have used to calculate the capital gain. Next, calculate the capital gains from collectables after applying the current year capital losses from collectables. Show the results at 1E to 1G (according to the method used).

If your entity has any unapplied current year capital loss from collectables ( C4 minus 1D), you can carry this forward to reduce the capital gains from collectables in later income years.

When you have completed Step A2.1 , transfer the amount of unapplied current year capital losses from collectables ( C4 minus 1D ) to UNCL from collectables at H in Part I . The amount at H also includes any unapplied prior year net capital losses (PYNCL) at Step A2.2 .

Step A2.2: Apply any prior year net capital losses (PYNCL) from collectables

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Does your entity have any current year capital gains from collectables?

No - If your entity has prior year net capital losses (PYNCL), complete 2A , 2B and 2C , and transfer the amount at 2C to H in Part I . Go to Part A3 .

Yes - Does your entity have a prior year net capital loss from collectables?

No - Transfer the amounts at 1E , 1F and 1G in Step A2.1 to J , K and L in Part A3 and continue on from Part A3 .

Yes - read on

At 2C , show the available prior year net capital losses from collectables after you have made any necessary adjustments for commercial debts forgiven. For more information on commercial debts forgiven, see Debt forgiveness and refer to your entity's tax return instructions.

At 2G , show the amount of capital losses that have been deducted from the current year capital gains from collectables.

While you can choose the order in which to reduce the capital gains, the order that usually provides the greatest benefit is:

1. the 'other' method, then
2. the indexation method, then
3. the discount method.

Deduct prior year net capital losses in the order in which they were made - for example, a 1995-96 year capital loss before a 1998-99 year capital loss.

At 2D to 2F , show the amounts of prior year net capital losses (PYNCL) from collectables in the order you have chosen.

At J , K and L in Step 2.2, show the capital gains from collectables after you have applied the current year capital losses and prior year net capital losses from collectables.

You can carry forward any unapplied net capital losses from collectables ( 2C minus 2G ) but in later income years you can only use them to reduce any capital gains from collectables (not from other CGT events).

When you have completed Step A2.2, transfer:

• the amounts at J , K and L to the corresponding labels in Part A3, and
• the amount of unapplied prior year net capital loss from collectables (referred to above) to UNCL from collectables at H in Part I , together with any unapplied current year capital losses from collectables at Step A2.1 .

PART A3: Total current year capital gains (CYCG)

At A3 , show the total of your entity's capital gains, including any net capital gain from collectables.

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Your entity may not have any of the following losses:

• current year capital losses
• prior year net capital losses, or
• capital losses transferred in.

In this case, transfer the amounts at A7 to A12 in Part A3 to A to F in Part E and continue on from Part F .

If your entity has one or more of these losses, read on.

PART B: Current year capital losses (CYCL) - other than from collectables

In Part B you show any current year capital losses your entity has made from:

• shares and units in unit trusts
• real estate
• other CGT assets and any other CGT events.

You can transfer these from your Capital gain or loss worksheets .

If your entity does not have any current year capital losses (other than from collectables), go to Part D .

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Do not include at C ( Other CGT assets and any other CGT events ) any capital loss made from personal use assets. Capital losses from personal use assets are disregarded and cannot be applied to reduce capital gains.

Capital losses made from collectables are not shown in Part B , they are shown in Part A2 .

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Now go straight to Part D - there is no Part C in this worksheet.

PART D: Applying capital losses against current year capital gains

In Part D you show your entity's current year capital gains reduced by:

• current year capital losses (CYCL), other than from collectables ( Step D1 )
• prior year net capital losses (PYNCL), other than from collectables ( Step D2 ), and
• capital losses transferred in (for companies only - Step D3 ).

Step D1: Apply current year capital losses (CYCL), other than capital losses from collectables

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Have you shown current year capital gains (CYCG) for your entity at A7 to A12 in Part D ?

No - Transfer D in Part B to I in Part I of the worksheet, then go to Step D2 .

Yes - Does your entity have current year capital losses (CYCL) or prior year net capital losses (PYNCL), other than from a collectable, or capital losses transferred in?

Yes - If your entity has CYCL, READ ON . If your entity has only PYNCL, transfer the amounts at A7 to A12 in Part D to 3G to 3L in Step D1 and then go to Step D2 . If your entity has only capital losses transferred in, go to Step D3 .

No - Transfer the amounts at A7 to A12 in Part D to A to F in Part E and continue on from Part F.

You can choose the order in which you deduct your entity's current year capital losses (at D in Part B ) from the current year capital gains (at A7 to A12 ).

If there are both non-active and active assets, you can choose which group of assets from which to deduct the losses. Generally, if your entity is entitled to the CGT small business concessions, it is better to reduce the non-active asset capital gains first. The order that usually provides the greatest benefit is to reduce the capital gains by:

1. the 'other' method, then
2. the indexation method, then
3. the discount method.

At 3A to 3F , show the amounts of current year capital losses in the order you have chosen. At 3G to 3L , show the capital gains after applying (deducting) the current year capital losses.

You can carry forward any unapplied current year capital loss other than from collectables ( D in Part B minus H ) to reduce capital gains that are not from collectables in later income years.

When you have completed Step D1 , transfer the amount of unapplied current year capital losses ( D minus H ) to UNCL from other CGT assets at I in Part I . The amount at I also includes any unapplied prior year net capital loss at Step D2 .

Step D2: Apply any prior year net capital losses (PYNCL), other than PYNCL from collectables

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Does your entity have any current year capital gain (CYCG) remaining?

No - If your entity has PYNCL, complete 4A , 4B and 4C and transfer the amount at 4C to I in Part I . Go to Part E .

Yes - Does your entity have any PYNCL, other than collectables?

Yes - Read on

No - If your entity is a company with capital losses transferred in, go to Step D3 . Otherwise, transfer 3G to 3L in Step D1 to A to F in Part E and continue on from Part F .

Reduce the prior year net capital losses by any adjustment for commercial debts forgiven. For more information on commercial debts forgiven, see Debt forgiveness and refer to your entity's tax return instructions.

You can choose the order in which to reduce your entity's capital gains. If there are both non-active and active assets, you can choose which group of assets from which to deduct the losses. Generally, if your entity is entitled to the CGT small business concessions, it is better to reduce the non-active asset capital gains first. The order that usually provides the greatest benefit is to reduce the capital gains by:

1. the 'other' method, then
2. the indexation method, then
3. the discount method.

However, you must deduct prior year net capital losses in the order in which they were made, for example, a 1995-96 year capital loss before a 1998-99 year capital loss.

At 4D to 4I , show the amounts of prior year net capital losses (PYNCL) in the order you have chosen. At 4J to 4O , show the capital gains after you have applied the current year capital losses and PYNCL.

You can carry forward any unapplied prior year net capital losses ( 4C minus L ) to reduce the capital gains (other than from collectables) in later income years.

When you have completed Step D2 , transfer the amount of unapplied prior year net capital losses ( 4C minus L ) to UNCL from other CGT assets at I in Part I , together with any unapplied current year capital losses at Step D1 .

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If your entity is a company with capital losses transferred in, go to Step D3 . Otherwise, transfer the amounts at 4J to 4O to A to F in Part E .

Step D3: Apply any capital losses transferred in

Only follow this step if your entity is a company with capital losses transferred in.

If your company has two or more net capital losses that can be transferred, transfer them only in the order in which they were made. The capital losses transferred in to the gain company need to be applied in the order they were received. The gain company must have enough capital gains to absorb the capital losses transferred in.

When you have completed Step D3 , transfer the amount of CYCG remaining after applying CYCL, PYNCL ( 4J to 4O in Step D2 ) and capital losses transferred in to A to F in Part E .

PART E: Current year capital gains (CYCG) after applying capital losses

In Part E you show your entity's current year capital gains reduced by current year capital losses, prior year net capital losses and capital losses transferred in.

PART F: CGT discount on capital gains

In Part F you show the amount of the CGT discount.

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Does your entity have a capital gain at Capital gains - discount method ( B or E ) in Part E ?

Yes - Read on

No - Go to Part G

Next, calculate the CGT discount that applies to the capital gains at B and E in Part E . The CGT discount is:

• 33 1/3 % for complying superannuation entities, or
• 50% for individuals and trusts.

Note

CGT discount

Companies are not eligible for the CGT discount unless they are life insurance companies or friendly societies that carry on life insurance business. These companies may be entitled to the CGT discount in relation to their complying superannuation business.

PART G: CGT small business concessions (other than the small business 15-year exemption)

In Part G you show any CGT small business concessions you are claiming. These may be:

• the small business 50% active asset reduction (SBAAR)
• the small business retirement exemption (SBRE)
• the small business roll-over (SBRO), or
• any combination of these concessions to which you are entitled.

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Is your entity eligible for the CGT small business concessions?

Yes - Read on

No - Go to Part H

For more information about the CGT small business concessions, obtain a copy of the publication Capital gains tax concessions for small business .

The small business 15-year exemption is only shown at Part J of the CGT schedule (if a schedule is required).

PART H: Net capital gain calculation

In Part H you show the amount of your entity's net capital gain.

Your entity's net capital gain is the amount remaining after applying any current year capital losses, net capital losses from prior years, capital losses transferred in, the CGT discount and any applicable CGT small business concessions.

A net capital gain is included as assessable income in your entity's income tax return in the relevant item.

PART I : Unapplied net capital losses carried forward to later income years

In Part I you show any unapplied net capital losses that your entity is carrying forward. These losses will be available to reduce any capital gains in later income years.

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Does your entity have any unapplied net capital losses?

Yes - Read on

No - You have finished the worksheet

At H and I , show details of any capital losses that are unapplied (that is, that have not been used).

At H , show the unapplied capital losses from collectables only. This is the sum of:

• any current year capital losses from collectables that have not been used to reduce capital gains from collectables this income year (that is, deduct 1D in Step A2.1 from C4 in Part A2 ), and
• any prior year net capital losses from collectables that have not been used to reduce capital gains from collectables this income year (that is, deduct 2G in Step A2.2 from 2C in Step A2.2 ).

At I , show all of the other capital losses, that is, the sum of:

• the current year capital losses that have not been used to reduce capital gains (that is, deduct H in Step D1 from D in Part B ), and
• the prior year net capital losses that have not been used to reduce capital gains (that is, deduct L in Step D2 from 4C in Step D2 ).

At V , show the total of the amounts at H and I .

The amounts at H and I are the unapplied net capital losses available to be carried forward and used to reduce your capital gains in later income years. Unapplied net capital losses from collectables can only be used to reduce capital gains from collectables in later income years.

Section 1C: How to complete the capital gains item in your entity's tax return

If your entity is required to complete a CGT schedule, you do not need to read this section: go to section 2 instead. If you are not sure whether you are required to complete a CGT schedule, check Capital gains tax schedule .

If your company, trust or fund is not required to complete a CGT schedule:

• transfer the amount at G in Part H of your entity's CGT summary worksheet to label A - Net capital gain in your entity's tax return, and
• add amounts at H and I in Part I of your entity's CGT summary worksheet and show the total amount at Losses information , label V - Net capital losses carried forward to later income years in your entity's tax return.

If you are an individual completing your 2001 tax return for individuals (supplementary section) or a tax agent completing a tax return on behalf of an individual:

• transfer the amount at Total CYCG, Part A3 of your CGT summary worksheet to label H - Total current year capital gains item 17 (Capital gains) in your tax return
• transfer the amount at label G , Part H of your CGT summary worksheet to label A - Net capital gain item 17 ( Capital gains ) in your tax return, and
• add amounts at labels H and I in Part I of your CGT summary worksheet and show the total at label V - Net capital losses carried forward to later income years item 17 ( Capital gains ) in your tax return.

Section 2: Using the two worksheets and the CGT schedule

You should read this section if your entity needs to complete a Capital gains tax (CGT) schedule 2001 (CGT schedule) as well as your tax return labels. Your entity is required to complete a CGT schedule if:

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

If you are required to complete a CGT schedule, you may need some help from a professional tax adviser or from the ATO. Sources of further information are listed in this guide .

Section 2A: How to complete the worksheets

In order to complete your entity's CGT schedule, you may still find it useful to first complete a Capital gain or loss worksheet for each CGT event and CGT summary worksheet to work out your capital gain or capital loss.

Refer to sections 1a and 1b to find out how to complete these worksheets, then go to section 2b to find out how to complete your entity's CGT schedule.

Section 2B: How to complete the CGT schedule

You need to follow these instructions carefully to make sure you complete your entity's CGT schedule correctly.

Print your entity's tax file number, name and Australian Business Number in the boxes provided. The CGT schedule must be signed in the same way that the 2000-01 tax return is signed.

Take the following steps to transfer the relevant information from your CGT summary worksheet:

PART A

1. Transfer the amounts from A to I and from M to U of your CGT summary worksheet to the corresponding labels in Part A of the CGT schedule.
2. Transfer the amounts at J , K and L of your CGT summary worksheet to the corresponding labels in Part A of the CGT schedule.

PART B

Transfer the amounts at A , B , C and D of your CGT summary worksheet to the corresponding labels in Part B of the CGT schedule.

PART C

There is no Part C to the CGT schedule.

PART D

Step D1 on page 4 of the CGT summary worksheet :

1. Add the amounts at columns 3A and 3D and transfer the total to label E in Part D of the CGT schedule.
2. Add the amounts at columns 3B and 3E and transfer the total to label F in Part D of the CGT schedule.
3. Add the amounts at columns 3C and 3F and transfer the total to label G in Part D of the CGT schedule.
4. Transfer the Total CYCL applied amount at H to label H in Part D of the CGT schedule.

Step D2 on page 5 of the CGT summary worksheet :

1. Add the amounts at columns 4D and 4G and transfer the total to label I in Part D of the CGT schedule.
2. Add the amounts at columns 4E and 4H and transfer the total to label J in Part D of the CGT schedule.
3. Add the amounts at columns 4F and 4I and transfer the total to label K in Part D of the CGT schedule.
4. Transfer the Total PYNCL applied amount at L to label L in Part D of the CGT schedule.

Step D3 on page 5 of the CGT summary worksheet :

1. Add the amounts at columns 5A and 5D and transfer the total to label M in Part D of the CGT schedule.
2. Add the amounts at columns 5B and 5E and transfer the total to label N in Part D of the CGT schedule.
3. Add the amounts at columns 5C and 5F and transfer the total to label O in Part D of the CGT schedule.
4. Transfer the Total capital losses transferred in amount at P to label P in Part D of the CGT schedule.

PART E

Transfer the amounts at A , B , C , D , E and F of the CGT summary worksheet to the corresponding labels in Part E of the CGT schedule.

PART F

Transfer the amounts at J and K of the CGT summary worksheet to the corresponding labels in Part F of the CGT schedule.

PART G

Transfer the amounts at rows L to N , O to Q and R to T of the CGT summary worksheet to the corresponding labels in Part G of the CGT schedule.

PART H

Transfer the amount at G of the CGT summary worksheet to label G in Part H of the CGT schedule.

PART I

Transfer the amounts at H and I of the CGT summary worksheet to the corresponding labels in Part I of the CGT schedule.

PART J

Print the total amount of any capital gains disregarded by this exemption, ignoring indexation and the CGT discount.

Print in the box at label K the code from the list below that best describes the CGT asset or CGT event from which your entity made the capital gain. If your entity made capital gains from more than one CGT asset or CGT event, select the code which best describes the type of CGT asset or CGT event that produced the largest amount of capital gain.

CGT asset or CGT event code

S	shares
U	units in unit trusts
R	real estate
G	goodwill
O	other CGT assets or CGT events not listed above

PART K

During the income year, did your entity choose scrip for scrip roll-over when an arrangement was made to exchange original interests for replacement interests? Original interests are shares or units or other interests (or an option, right or similar interest in a company or trust), while replacement interests are similar interests in another company or trust.

Print Y for yes or N for no at label A .

If yes :

Print at label B the amount of the cost base for all of the original interests exchanged (regardless of whether or not full roll-over was available).

Print at label C the total of the market value of the replacement interests acquired.

Print at label D the total of the amount of cash and other consideration received - do not include any amount already included at label C .

PART L (for companies and trusts only)

Was the company or trust an 'acquiring entity' during the income year under an arrangement for which original interest holders qualified for scrip for scrip roll-over? Print Y for yes or N for no at label E .

If yes, provide the information requested below in relation to the arrangement. If interests were acquired in more than one original entity, print at label F the number of original entities subject to such arrangements and provide the information requested below in respect of the arrangement involving the greatest cost base for the interests acquired.

Show at label G the tax file number (TFN) for the original entity.

Show at label H the number of shares, units or other interests issued in exchange for the shares or units or other interests acquired in the original entity.

Show at label I the number of options, rights or similar interests issued in exchange for the options, rights or similar interests acquired in the other entity.

Show at label J the amount of other consideration (including cash) given to acquire the shares, units or other interests, options, rights or similar interests in the original entity.

Show at label K the total of the first element of the cost bases of the shares, units or other interests, options, rights or similar interests acquired in the original entity as a result of the arrangement.

Did the company that issued replacement interests or the trustee of the trust, jointly with a significant or common stakeholder, choose to obtain a roll-over?

Print Y for yes or N for no at label L .

If the answer at label L is Y for yes, show at label M the total of the first element of the cost bases of the shares, or units or other interests, or options, rights or similar interests in the original entity (original interests) acquired directly from significant and common stakeholders for the arrangement, or issued by the original entity to the company or trust and attributable to original interests of significant and common stakeholders that were cancelled under the arrangement.

PART M (for companies only)

Did the company have an employee share scheme in place at any time during the year?

Print Y for yes or N for no at label N .

PART N (for companies only)

At the end of the income year, did the company still have any assets that were acquired before 20 September 1985 and that were not treated as post-CGT assets under Division 149?

Print Y for yes or N for no at label O .

PART O (for companies only)

During the income year, did the company have a share in, or a loan to, an associated company which either:

• forgave a debt owed by another company under common ownership, or
• suffered a substantial and permanent reduction in the value of the debt owed to it by the other company under common ownership?

Print Y for yes or N for no at label P .

If the answer at label P is Y for yes , show at label Q the total amount by which the company reduced the cost bases of all its shares and loans to the associated company.

During the income year, did a CGT event happen to a share held by the company in an associated company, where the associated company had previously owed a debt to a company under common ownership and that company under common ownership either forgave the debt or suffered a permanent and substantial reduction in the value of the debt?

Print Y for yes or N for no at label R .

If the answer at label R is Y for yes , show at label S the total amount by which the company adjusted the cost bases of all its shares in the associated company to which a CGT event happened.

PART P (for companies only)

During the income year, did a CGT event happen to a share in, or loan to, another company in the same wholly owned group, where that other company (or a company in which it had a direct or indirect interest) had previously transferred a tax loss or a net capital loss to any company in the group?

Print Y for yes or N for no at label T .

If the answer at label T is Y for yes , show at label U the total amount by which the company reduced the cost bases of such assets.

During the income year, did a CGT event happen to an asset of the company that was a share in, or a loan to, another company in the same wholly owned group, where a company in the group had previously transferred a tax loss or a net capital loss to that company (or a company in which it had a direct or indirect interest)?

Print Y for yes or N for no at label V .

If the answer at label V is Y for yes , show at label W the amount by which the company adjusted the cost bases of such assets.

After following all of these steps, you should have completed your entity's CGT schedule. Now you need to:

• follow the directions in section 2c below to complete your 2000-01 tax return, and
• lodge both the tax return and the CGT schedule together.

You should not lodge your worksheets - keep these with your own records.

Section 2C: How to complete the capital gains item in your entity's tax return

Once you have completed the CGT schedule, you need to complete your entity's 2000-01 tax return by following these steps:

• transfer the amount at G in Part H of your entity's CGT schedule to label A - Net capital gain in your entity's tax return, and
• add amounts at labels H and I in Part I of your entity's CGT schedule and print the total amount at Losses information , label V - Net capital losses carried forward to later income years in your entity's tax return.

Remember to lodge your tax return and your CGT schedule together.

ATO references:
NO NAT 4151