Guide to capital gains tax 2001

This version is no longer current. Please follow this link to view the current version.

This document has changed over time. View its history.

Appendices

Appendix 1: Consumer Price Index (CPI) figures

All groups - weighted average of eight capital cities
	Quarter ending
Year	31 March	30 June	30 Sep	31 Dec
1985	-	-	71.3	72.7
1986	74.4	75.6	77.6	79.8
1987	81.4	82.6	84.0	85.5
1988	87.0	88.5	90.2	92.0
1989	92.9	95.2	97.4	99.2
1990	100.9	102.5	103.3	106.0
1991	105.8	106.0	106.6	107.6
1992	107.6	107.3	107.4	107.9
1993	108.9	109.3	109.8	110.0
1994	110.4	111.2	111.9	112.8
1995	114.7	116.2	117.6	118.5
1996	119.0	119.8	120.1	120.3
1997	120.5	120.2	119.7	120.0
1998	120.3	121.0	121.3	121.9
1999	121.8	122.3	123.4	N/ A

Appendix 2: Recent share transactions

Company	Details of transaction
Amcor Ltd	Non-assessable payment On 14 April 2000 Amcor shareholders received a return of capital of $ 1.22 for each Amcor share they held. It was applied to acquire PaperlinX shares. The return of capital is a non-assessable payment, so shareholders who received PaperlinX shares should reduce the cost base and reduced cost base of their Amcor shares by $ 1.22 per share.
AMP Ltd	Demutualisation Acquisition cost for AMP Ltd shares is $ 10.43 per share and acquisition date is 20 November 1997. Note: Distribution from AMP Foundation Trust In addition to their final dividend in April 2001, AMP shareholders received a distribution from the AMP Foundation Trust. The trust used the discount method to calculate its capital gain and this will be shown on shareholders' distribution notices as the full capital gain (the grossed-up amount) . Shareholders do not need to gross up the capital gain amount themselves.
BHP Ltd	Non-assessable payment On 31 October 2000 BHP shareholders received a return of capital of 66 cents for each BHP share held. It was applied to acquire OneSteel shares. The return of capital is a non-assessable payment, so shareholders who received OneSteel shares should reduce the cost base and reduced cost base of their BHP shares by $ 0.66 per share.
Boral Ltd	Demerger Origin Energy Ltd (formerly called Boral Ltd) shareholders received one new Boral Ltd share for every two old Boral Ltd shares held. Acquisition cost of the new Boral Ltd shares is $ 3.16 per share and the acquisition date is 1 March 2000.
Coca-Cola Amatil Ltd	Non-assessable payment On 23 June 1998 Coca-Cola Amatil shareholders received a return of capital of $ 3.86 for each Coca-Cola Amatil share they held. It was applied to acquire Coca-Cola Beverages shares. The return of capital is a non-assessable payment, so shareholders who received Coca-Cola Beverages shares should reduce the cost base and reduced cost base of their Coca-Cola Amatil shares by $ 3.86 per share
Coca-Cola Beverages Ltd	Demerger Coca-Cola Amatil Ltd shareholders were entitled to one Coca-Cola Beverages share for each Coca-Cola Amatil share held. Acquisition cost of Coca-Cola Beverages shares is $ 3.86 per share and the acquisition date is 23 June 1998.
Commonwealth Bank of Australia Ltd	Public share offer For the first instalment: Acquisition date and indexation available from 13 July 1996. For the final instalment: Indexation applies from the date of receipt by the trust of the payment due on 14 November 1997 or of the discounted sum paid earlier. Share buy-back The buy-back price of $ 27.84 included $ 10.00 capital proceeds and a $ 17.84 fully franked dividend. The disposal date was 2 April 2001.
Lend Lease Ltd	Share buy-back The buy-back price of $ 19.88 included $ 7 capital proceeds and a $ 12.88 fully franked dividend. The disposal date was 2 October 2000.
NRMA Insurance Group Ltd (NIGL)	Demutualisation Acquisition cost of NIGL shares allocated to shareholders is $ 1.78 per share. Acquisition date was 19 June 2000. For additional shares purchased through the facility, acquisition cost is $ 2.75 and acquisition date was 6 August 2000. Share buy-back If you sold shares that you obtained under the demutualisation, there will be no capital gains tax consequences. This is because the buy-back price was paid in June 2001 and consisted of two components: 1. capital proceeds of $ 1.78 and 2. a fully franked dividend equal to the balance of the buy-back price in excess of $ 1.78. If you sold any of the additional shares you purchased through the facility (up to 181 shares) , you will make a capital loss. For example: Capital proceeds $ 1.78 Reduced cost base $ 2.75 Capital loss (per share) $ 0.97 If you acquired your shares by purchasing them on the stock exchange, whether you made a capital gain or capital loss will depend on the cost base of your shares.
OneSteel Ltd	Demerger BHP shareholders received one OneSteel Ltd share for every four BHP shares held. Acquisition cost of OneSteel shares is $ 2.64 per share and acquisition date is 31 October 2000.
Origin Energy Ltd	Non-assessable payment On 1 March 2000 shareholders in Origin Energy Ltd (formerly called Boral Ltd) received a return of capital of $ 3.16 for each Origin Energy share (or $ 1.58 for each old Boral Ltd share) held. It was applied to acquire the new Boral Ltd shares. The return of capital is a non-assessable payment, so shareholders who received new Boral Ltd shares should reduce the cost base and reduced cost base of their Origin Energy shares by $ 3.16 per share.
PaperlinX Ltd	Demerger Amcor shareholders were entitled to one PaperlinX share for every three Amcor shares they held. For each Amcor share they held, they received a return of capital of $ 1.22, which was applied to acquire PaperlinX shares. Acquisition cost of PaperlinX shares is $ 3.66 per share and acquisition date is 14 April 2000.
Suncorp-Metway Ltd	Exchange of Series 1 Exchanging Instalment Notes (EINs) Suncorp-Metway Ltd shares received in exchange for Series 1 EINs were acquired on 1 November 1999. Their acquisition cost is $ 8.20 per share
Telstra	Public Share Offer 1 For the first instalment: Acquisition of shares was (and indexation available from) 15 November 1997. For the final instalment: Indexation applies from the date of receipt by the trust of the payment due on 17 November 1998. Public Share Offer 2 For the first instalment: Date of acquisition was 22 October 1999 if the instalment receipts were purchased through the offer. No indexation applies because acquisition was after 21 September 1999. For the final instalment: No indexation as above.

Appendix 3: Summary of CGT events

Disposal

CGT event		Time of event	Capital gain	Capital loss
A1	Disposal of a CGT asset	when the disposal contract is entered into or, if none, when the entity stops being the asset's owner	capital proceeds from disposal less asset's cost bas	asset's reduced cost base less capital proceeds

Hire purchase and similar agreements

CGT event		Time of event	Capital gain	Capital loss
B1	Use and enjoyment before title passes	when use of the CGT asset passes	capital proceeds less the asset's cost basee	asset's reduced cost base less capital proceeds

End of a CGT asset

CGT event		Time of event	Capital gain	Capital loss
C1	Loss or destruction of a CGT asset	when compensation is first received or, if none, when the loss is discovered or destruction occurred	capital proceeds less the asset's cost base	asset's reduced cost base less capital proceeds
C2	Cancellation, surrender and similar endings	when the contract ending an asset is entered into or, if none, when an asset ends	capital proceeds from the ending less asset's cost base	asset's reduced cost base less capital proceeds
C3	End of an option to acquire shares and so on	when the option ends	capital proceeds from granting the option less expenditure in granting it	expenditure in granting the option less capital proceeds

Bringing a CGT asset into existence

CGT event		Time of event	Capital gain	Capital loss
D1	Creating contractual or other rights	when the contract is entered into or the right is created	capital proceeds from creating the right less incidental costs of creating the right	incidental costs of creating the right less capital proceeds
D2	Granting an option	when the option is granted	capital proceeds from the grant less expenditure to grant it	expenditure to grant the option less capital proceeds
D3	Granting a right to income from mining	when the contract is entered into or, if none, when the right is granted	capital proceeds from the grant of right less the expenditure to grant it	expenditure to grant the right less capital proceeds

Trusts

CGT event		Time of event	Capital gain	Capital loss
E1	Creating a trust over a CGT asset	when the trust is created	capital proceeds from creating the trust less the asset's cost base	asset's reduced cost base less capital proceeds
E2	Transferring a CGT asset to a trust	when the asset is transferred	asset's reduced cost base less capital proceeds	capital proceeds from the transfer less the asset's cost base
E3	Converting a trust to a unit trust	when the trust is converted	market value of the asset at that time less its cost base	asset's reduced cost base less that market value
E4	Capital payment for trust interest	when the trustee makes the payment	non-assessable part of the payment less the cost base of the trust interest	no capital loss
E5	Beneficiary becoming entitled to a trust asset	when the beneficiary becomes absolutely entitled	for a trustee - market value of the CGT asset at that time less its cost base; for a beneficiary - that market value less the cost base of the beneficiary's capital interest	for a trustee - reduced cost base of the CGT asset at that time less that market value; for a beneficiary - reduced cost base of the beneficiary's capital interest less that market value
E6	Disposal to a beneficiary to end an income right	the time of the disposal	for a trustee - market value of the CGT asset at that time less its cost base; for a beneficiary - that market value less the cost base of the beneficiary's right to income	for a trustee - reduced cost base of the CGT asset at that time less that market value; for a beneficiary - reduced cost base of the beneficiary's right to income less that market value
E7	Disposal to a beneficiary to end capital interest	the time of the disposal	for a trustee - market value of the CGT asset at that time less its cost base; for a beneficiary - that market value less the cost base of the beneficiary's capital interest	for a trustee - reduced cost base of the CGT asset at that time less that market value; for a beneficiary - reduced cost base of the beneficiary's capital interest less that market value
E8	Disposal by a beneficiary of capital interest	when the disposal contract is entered into or, if none, when the beneficiary ceases to own the CGT asset	capital proceeds less the appropriate proportion of the trust's net assets	appropriate proportion of the trust's net assets less the capital proceeds
E9	Creating a trust over future property	when the entity makes an agreement	market value of the property (as if it existed when the agreement was made) less incidental costs in making the agreement	incidental costs in making the agreement less the market value of the property (as if it existed when the agreement was made)

Leases

CGT event		Time of event	Capital gain	Capital loss
F1	Granting a long term lease	for granting a lease - when the entity enters into the lease contract or, if none, at the start of the lease; for a lease renewal or extension - at the start of the renewal or extension	capital proceeds less the expenditure on grant, renewal or extension	expenditure on grant, renewal or extension less capital proceeds
F2	Granting a long term lease	for granting a lease - when the lessor grants the lease; for a lease renewal or extension - at the start of the renewal or extension	capital proceeds from the grant, renewal or extension less the cost base of the leased property	reduced cost base of the leased property less the capital proceeds from the grant, renewal or extension
F3	Lessor pays lessee to get lease changed	when the lease term is varied or waived	no capital gain	amount of expenditure to get lessee's agreement
F4	Lessee receives payment for changing a lease	when the lease term is varied or waived	capital proceeds less the cost base of lease	no capital loss
F5	Lessor receives payment for changing a lease	when the lease term is varied or waived s	capital proceeds less expenditure in relation to variation or waiver	expenditure in relation to variation or waiver less capital proceed

CGT event		Time of event	Capital gain	Capital loss
G1	Capital payment for shares	when the company pays a non-assessable amount	payment less cost base of shares	no capital loss
G2	Shifts in share values	when the shift happens	the decrease in the shares market value (so far as it has shifted into certain other shares) less the corresponding proportion of the shares' cost base	no capital loss
G3	Liquidator declares shares worthless	when the liquidator makes the declaration	no capital gain	shares' reduced cost base

Special capital receipts

CGT event		Time of event	Capital gain	Capital loss
H1	Forfeiture of a deposit	when the deposit is forfeited	deposit less expenditure in connection with the prospective sale	expenditure in connection with the prospective sale less deposit
H2	Receipt for an event relating to a CGT asset	when the act, transaction or event occurred	capital proceeds less the incidental costs	incidental costs less capital proceeds

Cessation of residency

CGT event		Time of event	Capital gain	Capital loss
I1	Individual or company stops being a resident	when the individual or company stops being an Australian resident	for each CGT asset the person owns, its market value less its cost base	for each CGT asset the person owns, its reduced cost base less its market value
I2	Trust stops being a resident trust	when the trust ceases to be a resident trust for CGT purposes	for each CGT asset the trustee owns, its market value less its cost base	for each CGT asset the trustee owns, its reduced cost base less its market value

Reversal of roll-over

CGT event		Time of event	Capital gain	Capital loss
J1	Company stops being a member of a wholly owned group after a roll-over	when the company stops	market value of the asset at the time of the event less its cost base	reduced cost base of the asset less that market value
J2	Change in status of a CGT asset that was a replacement asset in a roll-over under Subdivision 152-E	when the change in status happens	the amount of the capital gain that you disregarded under Subdivision 152-E	no capital loss
J3	A change happens in circumstances where a share in a company or an interest in a trust was a replacement asset in a roll-over under Subdivision 152-E	when the change in circumstances happens	the amount of the capital gain that you disregarded under Subdivision 152-E	no capital loss

Other CGT events

CGT event		Time of event	Capital gain	Capital loss
K1	Partial realisation of an intellectual property right	when a contract is entered into or, if none, when partial realisation happens	capital proceeds from partial realisation less the cost base of the item of intellectual property	no capital loss
K2	Bankrupt pays an amount in relation to debt	when payment is made	no capital gain	that part of the payment that relates to the denied part of a net capital loss
K3	Asset passing to a tax-advantaged entity	when an individual dies	market value of the asset at death less its cost base	reduced cost base of the asset less that market value
K4	CGT asset starts being trading stock	when the asset starts being trading stock	market value of asset less its cost base	reduced cost base of asset less its market value
K5	Special capital loss from a collectable that has fallen in market value	when CGT event A1, C2 or E8 happens to shares in the company, or an interest in the trust, that owns the collectable	no capital gain	market value of the shares or interest (as if the collectable had not fallen in market value) less the capital proceeds from CGT event A1, C2 or E8
K6	Pre-CGT shares or trust interest	when another CGT event involving the shares or interest happens	capital proceeds from the shares or trust interest that are attributable to a post-CGT asset owned by the company or trust, less the assets' cost bases	no capital loss

Appendix 4: Flowcharts

Flowchart 1 Treatment of bonus shares issued on or after 20 September 1985

Download a copy of flowchart 1 here.

Flowchart 2: Treatment of bonus units issued on or after 20 September 1985

Download a copy of flowchart 2 here .

Flowchart 3: Treatment of rights or options to acquire shares or units issued directly to you from a company or trust for no payment

Download a copy of flowchart 3 here .

Flowchart 4: Treatment of rights or options to acquire shares or units issued that you paid to acquire from a company or trust or from another person

Download a copy of flowchart 4 here .

Appendix 5: Example of sale of a rental property

In his own right, Brett purchases a run down rental property on 1 July 1997. The price he paid was $150 000 plus $20 000 in total for stamp duty and solicitors fees.

He rents out the property after spending $2500 on initial repairs.

In the next few years, Brett incurred the following expenses on the property:

	$
Interest on money borrowed	10 000
Rates and land tax	8 000
Repairs	15 000
	33 000

As it was an old property, there was no special building write-off Brett could claim.

When Brett decided to sell the property, a real estate agent advised him that if he spent around $30 000 on major structural repairs, the property would be valued at around $500 000. He had the repairs done and put the property on the market. On 1 April 2001 he sold the property for $500 000.

Brett's real estate agents fees and solicitors fees upon the sale of the property totalled $12 500.

As this is Brett's only capital gain for this year - and he has no capital losses to offset from this year or previous years - he works out his cost base as follows:

	$
Purchase price of property	150 000
Stamp duty and solicitors fees on purchase	20 000
Capital expenditure (initial repairs)	2 500
Capital expenditure (major structural repairs)	30 000
Real estate agents fees and solicitors fees	12 500
	215 000

Brett deducts his cost base (expenses) from his capital proceeds (sale price).

	$
Proceeds from selling the house	500 000
Cost base unindexed	215 000
	285 000

Brett shows $285 000 at label H - Total current year capital gains in item 17.

He decides the discount method will give him the best result, so uses this method to calculate his capital gain.

$285 000 x 50% = $142 500

Brett shows $142 500 at label A item 17.

Download a copy of Brett's worksheet here .

ATO references:
NO NAT 4151

Guide to capital gains tax 2001

	Date:	Version:
You are here	1 July 2000	Original document
	1 July 2001	Updated document
	1 July 2002	Updated document
	1 July 2003	Updated document
	1 July 2004	Updated document
	1 July 2005	Updated document
	1 July 2006	Updated document
	1 July 2007	Updated document
	1 July 2008	Updated document
	1 July 2009	Updated document
	1 July 2010	Updated document
	1 July 2011	Updated document
	1 July 2012	Updated document
	1 July 2013	Updated document
	1 July 2014	Updated document
	1 July 2015	Updated document
	1 July 2016	Updated document
	1 July 2017	Updated document
	1 July 2018	Updated document
	1 July 2019	Updated document
	1 July 2020	Updated document
	1 July 2021	Updated document
	1 July 2022	Updated document
	1 July 2023	Current document

Copyright notice

You are free to copy, adapt, modify, transmit and distribute material on this website as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).