Private ruling: Capital gains - inclusion as assessable income
Published: April 2013
Ruling period: Year ended 30 June 2012
Date scheme commenced: 1 July 2011

Ruling: Q1: Are capital gains earned from managed fund investments included as assessable income on your income tax return? | A1: Yes

Relevant facts and circumstances: You have held a joint investment with your spouse in a managed investment fund for a number of years. Your tax statement, issued by the fund for the relevant year, includes a capital gain amount. You have spoken to a representative of your investment fund who advised that the capital gain amount shown on your tax statement does not need to be reported in your relevant income tax return.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 10-5 | Income Tax Assessment Act 1997 section 102-5

Reasons for decision: Summary: A capital gain or capital loss is the difference between what it cost you to get an asset and what you received when you disposed of it. Capital gains are categorised as statutory income under section 10-5 of the Income Tax Assessment Act 1997 (ITAA 1997). Capital gains are assessable and should be included in your income tax return by operation of section 102-5 of the ITAA 1997. You are required to include your net capital gains in your tax return as assessable income. In your case, the capital gain you made was listed on your tax statement as an 'NTARP' capital gain. If you are a resident of Australia for tax purposes, the classification of an 'NTARP' capital gain is irrelevant, and this amount must be included in your income tax return as assessable income.