Guide to capital gains tax 2003

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

Introduction

Steps you need to take

Step 1: How to complete the capital gain or capital loss worksheet

Step 2: How to complete the CGT summary worksheet

Step 3: How to complete the capital gains item on your entity's tax return

Step 4: How to complete the CGT schedule

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

Are you an individual?

If you are completing a tax return on behalf of an individual (rather than an entity) read part B of this guide, and only read part C (this part) if you need help completing the sample worksheets.

Is your entity a company, trust or fund?

If the tax return is for a company, trust or fund, read this part of the guide.

Do you expect your entity's total capital gains or total capital losses for the 2002-03 income year to be $10,000 or less?

YES	Work through steps 1, 2 and 3.
NO	Work through steps 1 - 4. Step 4 will show you how to complete the Capital gains tax (CGT) schedule 2003.

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 on the relevant tax return. This will be:

• Company tax return 2003 - item 7
• Trust tax return 2003 - item 18 , or
• Fund income tax and regulatory return 2003 - item 9a .

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

The labels to complete at these items are:

G	Did you have a CGT event during the year?
A	Net capital gain

(If you are an individual, you will also need to complete H Total current year capital gains ).

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

The relevant item number will be:

• Company tax return 2003 - item 10
• Trust tax return 2003 - item 24, or
• Fund income tax and regulatory return 2003 - item 10.

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 Explanation of terms .

Note

Entity

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 sample worksheets provided are the:

• Capital gain or capital loss worksheet (to calculate the capital gain or capital loss from each CGT event)
• CGT summary worksheet (to calculate the net capital gain or net capital loss and complete the CGT labels on the 2002-03 tax return).

The worksheets 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 on your entity's tax return, and a Capital gains tax (CGT) schedule 2003 if this is required.

Note

Individuals

If you are an individual taxpayer, you may also use the worksheets at the back of this guide and the related instructions in steps 1, 2 and 3 to calculate your net capital gain or net capital loss and complete the capital gains item on your tax return. As an individual, you are not required to complete a CGT schedule when lodging a paper tax return, regardless of the amount of your capital gains or capital losses.

CGT schedule

Your entity must complete this schedule for the 2002-03 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.

The CGT schedule replaces several tax return labels used in past tax returns.

If your entity is required to complete a CGT schedule, you must attach it to your entity's 2002-03 tax return.

Note

Consolidated groups

Where 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 becomes a subsidiary member of a consolidated group at any time during the income year - and remains a subsidiary member at the end of the income year - is not required to lodge a CGT schedule, regardless of the amount of any capital gains or capital losses it makes.

Steps you need to take

The completion of the CGT labels on your entity's 2002-03 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 2002-03 income year using the Capital gain or capital loss worksheet .

Step 2

Calculate the net capital gain or net capital loss for the 2002-03 income year 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 .

Step 1 How to complete a capital gain or capital loss worksheet for each CGT event

The Capital gain or capital loss worksheet calculates a capital gain or capital loss for each separate CGT event. Do not attach completed worksheets to your entity's 2002-03 tax return - these are your working papers and should be kept with your entity's tax records.

Note

Consolidated groups

Refer to the Consolidation reference manual which provides detailed information on the operation of consolidation. To get this publication and other consolidation products, phone the business tax reform infoline on 13 24 78 or visit the business tax reform section of < www.ato.gov.au >

Remember that when you are using the Capital gain or capital 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
• collectables

There are special rules that apply when working out a capital gain or capital loss for a depreciating asset. A capital gain or capital loss will only arise to the extent that a depreciating asset is used for a non-taxable purpose (for example, used privately). The capital gain or capital loss is calculated having regard to concepts used in the uniform capital allowance provisions. Those provisions also treat as income or allow as a deduction any gain or loss from a depreciating asset to the extent that it was used for a taxable purpose

• 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
  • 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
  • '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 part A chapter 2 and are also listed in Explanation of terms .

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.

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

Step 2 How to complete the CGT summary worksheet

The CGT summary worksheet is used to calculate your entity's net capital gain or net capital loss for the 2002-03 income year. It also provides the information you need to complete the capital gains item on your entity's tax return and, if required, the CGT schedule.

You should include on this worksheet any capital gain your entity is entitled to as a distribution from a trust.

The CGT summary worksheet is designed for entities that make capital gains or capital losses 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 CGT affairs.

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Transfer the capital gain or capital loss calculated on each Capital gain or capital 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 active assets if certain conditions are met.

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

• 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 years old 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 life-time limit of $500,000) to be disregarded if the conditions are satisfied. If you are under 55 years old and are eligible for this exemption, the amount must be paid into a superannuation (or similar) fund
• 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, get the publication Capital gains tax concessions for small business .

Note

Active assets

Remember that at 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 three CGT small business concessions:

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

If the asset does not qualify for one or more of these three concessions, include the capital gain at Non-active assets.

Note

Limit on value of assets

The CGT small business concessions are not available if the net value of the assets of your entity and related entities just before the CGT event exceeds $5 million. If your entity is not entitled to the small business concessions, include the capital gain at Non-active assets .

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. Combine the details from both CGT summary worksheets onto one CGT schedule, if it is required.

The parts in this step 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

You generally do not include any capital gain to which an exemption (for example, the small business15-year exemption) or exception applies.

However you must include in the Active assets columns, capital gains for which your entity may be exempt because it is entitled to one or more of the following:

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

If a capital gain does not qualify for one or more of these three concessions, include it at Non-active assets .

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 capital loss worksheets .

Trust capital gains

You must also include at G to I and S to U on this worksheet any distribution from a trust of a net capital gain from a CGT event (other than one involving a collectable) that your entity is entitled to.

You must use the same method as the method used by the trustee to calculate your entity's capital gain from the trust. For example, if the trustee used the discount method to calculate a capital gain, you must use the same method. In some cases your entity must gross up the amount of the trust capital gain. If this applies, you include the grossed-up amount at H , S , T and U , as explained below.

If the trustee used the discount method to calculate a capital gain, you need to gross it up by multiplying the distribution amount by two. You include the result at H . Grossing up ensures that any capital losses your entity has made are deducted from your entity's grossed-up capital gain before the CGT discount is applied.

If the trust's capital gain was reduced by the small business 50% active asset reduction, again it needs to be grossed-up by multiplying the distribution amount by two. Include 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 include the result at T .

Amount of capital gain

Show the full amount of all capital gains in part A1 .

Do not show the amount remaining after applying:

• capital losses (which are applied at part D on the worksheet ).
• the CGT discount (which is applied at part F on the worksheet ), or
• the CGT small business concessions (which are applied at part G on the worksheet ).

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

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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

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

If your entity was entitled to a distribution of a net capital gain from a trust resulting from a collectable, show this amount at C5 to C7 . You must use the same method as the trustee to calculate your entity's capital gain from the trust. For example, if the trustee used the discount method to calculate a capital gain, you need to do the same and show the grossed up amount at C6 .

If the trustee used the discount method to calculate a capital gain, you 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.

The totals of all of your entity's capital gains from collectables are shown at C8 to C10 .

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 from collectables. This reduces your CGT obligation. If your entity has current year capital losses from collectables that can be deducted they must be deducted here. You cannot choose to defer to a later year any amount that can be deducted this year.

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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 a current year capital loss from a collectible?
	NO	Transfer the amounts at C8 , C9 and C10 to 1E , 1F and 1G and then go to step A2.2
	YES	Read on

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 the best result, which would usually be to apply the losses against:

1. capital gains calculated using the 'other' method, then
2. capital gains calculated using the indexation method, then
3. capital gains calculated using the discount method.

Show the amounts deducted from capital gains from your collectables at 1A to 1C , depending on the choice made about how to deduct the losses. The total losses from collectables deducted from gains from collectables are shown at 1D .

Show any remaining capital gains from collectables at 1E to 1G .

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. Transfer the amount of unapplied current year capital losses from collectables to H - UNCL from collectables in part I .

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

If your entity has prior year net capital losses that can be deducted, they must be deducted here. You cannot choose to defer to a later year any amount that can be deducted this year.

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Does your entity have any remaining 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 shown at 2B . For more information see commercial debts forgiven , and refer to your entity's tax return instructions.

Again, prior year net capital losses from collectables can be deducted from any remaining capital gains from collectables in the manner that produces the best result. They must however be deducted in the order in which they were made - for example, a 1995-96 year capital loss should be deducted 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 2G, show the total amount of prior year net capital losses from collectables that have been deducted from the current year capital gains from collectables.

At J , K and L in step A2.2, 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 assets).

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 H - UNCL from collectables 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) at A
• real estate at B , and
• other CGT assets and any other CGT events at C .

The total is shown at D .

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

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

Do not include any capital loss made from personal use assets at C - Other CGT assets and any other CGT events . 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 should have been 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.

If your entity has current year capital losses, other than capital losses from collectables, that can be deducted they must be deducted here. You cannot choose to defer to a later year any amount that can be deducted this year.

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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?
	NO	Transfer the amounts at A7 to A12 in part D to A to F in part E and continue on from part F .
	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 .

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 ).

Generally, if your entity is entitled to the CGT small business concessions, it is better to reduce the non-active asset capital gains first. Within the non-active and active categories you usually get the greatest benefit by reducing:

1. capital gains calculated using the 'other' method, then
2. capital gains calculated using the indexation method, then
3. capital gains calculated using the discount method.

At 3A to 3F , show the amounts of current year capital losses deducted in the order you have chosen with the total at H . 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 in later income years.

When you have completed step D1 , transfer the amount of unapplied current year capital losses ( D minus H ) to I - UNCL from other CGT assets in part I .

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

If your entity has prior year net capital losses, other than prior year net capital losses from collectables, that can be deducted, they must be deducted here.

You cannot choose to defer to a later year any amount that can be deducted this year.

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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?
	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 .
	YES	Read on

Reduce the prior year net capital losses at 4A by any adjustment for commercial debts forgiven at 4B . For more information see commercial debts forgiven and refer to your entity's tax return instructions.

Again, prior year net capital losses can be deducted from any remaining capital gains in the manner that produces the best result. See discussion for step D1 . They must however be deducted in the order in which they were made - for example, a 1995-96 year capital loss must be deducted 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 and the total at L . 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 in later income years.

When you have completed step D2 , transfer the amount of unapplied prior year net capital losses ( 4C minus L ) to I - UNCL from other CGT assets 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 remaining capital gain 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.

The capital losses transferred in to your entity need to be applied in the order they were received. Your entity 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 apply 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 ?

NO	Go to part G
YES	Read on

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.

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

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

Show the amount of the CGT discount at J and K in part F .

Show the amount of your remaining capital gains at 6A to 6F in part F .

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

In part G you apply the CGT small business concessions your entity is claiming. For more information about the CGT small business concessions, get the publication Capital gains tax concessions for small business .

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Is your entity eligible for the CGT small business concessions?

NO	Go to part H
YES	Read on

Show:

• the amount of your entity's small business 50% active asset reduction (SBAAR) at L to N
• the amount of your entity's small business retirement exemption (SBRE) at O to Q , and
• the amount of your entity's small business roll-over (SBRO) at R to T .

Show the total amount of the small business concessions your entity is claiming at 7A to 7D of part G .

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 on your entity's income tax return at the relevant item. See step 3 .

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?

NO	You have finished the worksheet
YES	Read on

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.

Step 3 How to complete the capital gains item on 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 your entity made a capital gain or capital loss during the income year:

• print Y (for yes) at G Did you have a capital gains tax event during the year? at the capital gains item on your entity's tax return
• transfer the amount at G in part H of your entity's CGT summary worksheet to A Net capital gain on your entity's tax return, and
• add the amounts, if any, at H and I in part I of your entity's CGT summary worksheet and show the total amount at Losses information , V Net capital losses carried forward to later income years on your entity's tax return.

If you are an individual completing your 2003 tax return for individuals (supplementary section) or a tax agent completing a tax return on behalf of an individual:

• print Y (for yes) at G Did you have a capital gains tax event during the year? item 17 Capital gains on your tax return
• transfer the amount at Total CYCG , part A3 of your CGT summary worksheet to H Total current year capital gains item 17 Capital gains on your tax return
• transfer the amount at G , part H of your CGT summary worksheet to A Net capital gain item 17 Capital gains on your tax return, and
• add the amounts, if any, at H and I in part I of your CGT summary worksheet and show the total at V Net capital losses carried forward to later income years item 17 Capital gains on your tax return.

Step 4 How to complete the CGT schedule

Your entity must complete a CGT schedule for the 2002-03 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.

Note

Consolidated groups

Where 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 becomes a subsidiary member of a consolidated group during the income year - and remains a subsidiary member at the end of the income year - is not required to lodge a CGT schedule, regardless of the amount of any capital gains or capital losses it makes.

If your entity is required to complete a CGT schedule, attach it to your entity's 2002-03 tax return. Only one CGT schedule should be lodged with your entity's tax return.

If you are lodging a paper tax return and CGT schedule, please use the preprinted Capital gains tax (CGT) schedule 2003 provided at the back of this guide. To get extra copies of the preprinted schedule, phone our Publications Distribution Service on 1300 720 092 .

Note

Individuals

If you are an individual taxpayer, you are not required to complete a CGT schedule when lodging a paper tax return, regardless of the amount of your capital gains or capital losses.

You need to follow these instructions carefully to make sure you complete your entity's CGT schedule correctly. All relevant parts of the CGT schedule, including parts J to P must be completed.

Print your entity's TFN, name and Australian business number in the boxes provided. The CGT schedule must be signed in the same way that the 2002-03 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 on your CGT summary worksheet to the corresponding labels in part A of the CGT schedule.
2. Transfer the amounts at J , K and L on your CGT summary worksheet (after step A2.2 ) to the corresponding labels in part A of the CGT schedule.

Part B

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

Part C

There is no part C in the CGT schedule.

Part D

From step D1 on page 4 of the CGT summary worksheet :

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

From step D2 on page 5 of the CGT summary worksheet :

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

From step D3 on page 5 of the CGT summary worksheet :

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

Write the total amount of any capital gains disregarded by the small business 15-year exemption (do not apply the CGT discount) at J in part J of the CGT schedule.

Print in the box at 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 A .

If you printed Y for yes:

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

Write at C the total of the market value of the replacement interests acquired.

Write at D the total of the amount of cash and other considerations received, do not include any amount already included at 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 E .

If you printed Y for yes , provide the information requested below in relation to the arrangement. If interests were acquired in more than one original entity, write at 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 G the TFN for the original entity.

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

Show at 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 receive a roll-over?

Print Y for yes or N for no at L .

If the answer at L is yes , show at 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 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 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 under a scheme (as defined) entered into prior to

27 June 2002 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 P .

If the answer at P is yes , show at 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 R .

If the answer at R is yes , show at 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 T .

If the answer at T is yes , show at 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 V .

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

After following all these steps, you should have completed your entity's CGT schedule.

Remember to lodge the CGT schedule with your entity's tax return.

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

ATO references:
NO NAT 4151