The following questions will help you to identify possible capital gains tax (CGT) obligations. If you answer ‘yes’ to any of these questions, CGT may apply.
Some questions are intended to highlight the possibility of a capital gain or loss arising in the current year, others to alert you to the possibility of a CGT exposure in the future and the need to keep appropriate records. This list of questions is not exhaustive.
Real estate: current year CGT impacts
- Have you sold or given away any real estate in the past financial year (including your main residence)?
- Has there been a change to the title of real estate that you owned (or partially owned) at the start of the year?
- Have you granted an option, conservation covenant or other right (for example, an easement over real estate) in the year?
- Have you granted, changed or varied a lease over your real estate in the past year?
- Has any building or capital improvement on your land been destroyed in the past year?
- Did you receive compensation in the past year in respect of real estate you own?
- In the past year, have you sold any rights you held in real estate, such as contractual rights relating to an off-the-plan purchase?
Real estate: future year CGT impacts
- Do you own real estate (including an inheritance) that is not your main residence (for example, land, investment property or holiday house)?
- Used as a place of business or to derive rent or has not been your main residence the whole time you owned it
- Situated on more than 2 hectares (4.94 acres) of land, or
- A different home to your spouse or dependent child (under 18 years old)?
- Have you made any capital improvements to any real estate that you own?
- Have you subdivided or amalgamated any real estate that you own?
Shares and investment units
- Do you own any shares, units in a unit trust or other investments (for example, convertible notes)?
- If so, did your interests change during the year (that is, because they were sold, transferred, cancelled or ended)?
- Did your interests in an employee share scheme change?
- Did you receive compensation in the past year in respect of any investments you own?
- Did you receive a non-assessable payment from a company or trust in which you have an investment?
- Did you receive a distribution from a trust that includes a capital gain?
- Has the trustee provided you with a statement indicating how they calculated the trust’s capital gain?
- Has the entity in which you own an investment
- been involved in a takeover, demerger, demutualisation or merger
- gone into liquidation, or
- conducted a share buy-back?
- Did you acquire any of your shares or units
- under a dividend or distribution re-investment plan
- under a bonus issue, or
- as the result of the exercise of a right or option to acquire additional shares/units?
Trust distribution
- Are you a beneficiary of any other trust (that is, other than one in which you hold units as an investment)?
- Have you received a distribution from the trust that includes a capital gain?
- If so, has the trustee provided you with a statement indicating how they calculated the trust’s capital gain?
- Have you received a distribution from the trust that includes a non-assessable payment?
- If so, has the trustee provided you with a statement indicating the nature of the distribution? (for example, tax-free amounts, CGT concession amounts, tax exempted amounts, tax-deferred amounts)
Business
- Do you own a small business or have an interest in one?
- Did you dispose of all or some of the assets of a business during the year?
- If you did dispose of any business assets, did you account for goods and service tax (GST) on those assets?
- Did you acquire a business or business assets during the year?
Marriage or relationship breakdown
- Have you acquired an asset, or an interest in one, from your former spouse after the breakdown of your marriage or relationship?
- Was the asset transferred because of
- a court order, including a consent order
- an arbitral award or corresponding award (under a corresponding state or territory law), or
- a binding financial agreement (or a written agreement that is binding because of a State or Territory law relating to de facto marriage breakdowns)?
Deceased estates
- Are you the legal personal representative (LPR) or beneficiary of a deceased person’s estate?
- Have you distributed (as LPR) or received a distribution of (as beneficiary) an asset from the deceased estate?
Other CGT events
- Has your interest in a collectable acquired for more than $500 changed (including items such as art, antiques, jewellery, coins or medallions, rare books and manuscripts and postage stamps)?
- Has your interest in a personal use asset acquired for more than $10,000 changed (including items such as boats, furniture, electrical goods and household items)?
- ave you received or become entitled to a capital payment (including compensation, restrictive covenants, contingent payments, or other consideration for an act, transaction or event)?
If you answered ‘yes’ to one or more questions, you may have CGT obligations now or in the future.
The importance of record keeping
Records need to be kept for everything that affects capital gains and losses. Keeping appropriate records will help to calculate the correct amount of a capital gain or loss made when a CGT event happens.
- Are you aware of the records that you need to keep to calculate your capital gains or losses?
- Are you aware that you need to keep these records for at least five years after the last relevant CGT event?
- Are you aware that an asset register may enable you to discard records that would otherwise need to be kept?
- Do you have a prior year capital loss that has been carried forward?
- Have you considered the GST implications in relation to your CGT events?
