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Capital Gains Tax Exemptions

The framework of capital gains tax is as a tax on all “CGT events”, except for the exceptions.

In general a capital gain event is usually the disposal or deemed disposal of an asset.

The event must have occurred after the starting date for the CGT rules which was 19 September 1985, and be in respect of assets acquired before that date.

Specific kinds of events are listed in the CGT rules. Determining any CGT implication from a transaction therefore starts with a review of CGT Event definitions to see which (if any) apply.

Exclusion of a capital gain from taxation can occur in a number of ways. Common examples include

  1. the asset was acquired before CGT started (19 September 1985)
  2. the income tax rules get the first grab i.e. CGT only applies to the extent that ordinary income tax doesn’t
  3. exemption of certain kinds of asset, with limitations – e.g. the family home, personal use, collectables, depreciating assets and trading stock
  4. deferral of taxation until recognition of a subsequent event, rollovers – e.g. small business concessions, divorce settlement arrangements (see family law property settlements article below), deceased estate inheritances
  5. exemption of certain kinds of income or receipt – e.g. compensation for personal injury
  6. exemption based on the status of the taxpayer –  e.g.  non-residents’ are only subject to CGT on Taxable Australian Property, (sec 855.15) which would ordinarily exclude listed shares in non land rich companies
  7. Capital gains discount for individuals and super funds on assets held for at least 12 months

See further

This is not intended as a complete listing of exemptions. This is general information which provides no basis for decisions. Please seek professional advice.

This page was last modified 2021-05-22