Private ruling: Discount capital gain
Published: January 2013
Ruling period: Year ending 30 June 2014 | Year ending 30 June 2015
Date scheme commenced: 1 July 2013

Ruling: Q1: Where the sale of a property results in a capital gain, are you eligible to discount the capital gain? | A1: Yes.

Relevant facts and circumstances: You are an individual. You purchased a property in the 2009-10 financial year. The property is being leased on a commercial basis. During the 2012-13 financial year you lodged an application to develop the property. Once the application is approved you will sell the property. You have not yet entered into any agreements to sell the property. Income Tax Assessment Act 1997 Section 115-5


Reasons for decision: Summary: Under section 115-5 of the Income Tax Assessment Act 1997 you make a discount capital gain if the following requirements are satisfied: · you are an individual, a trust or a complying superannuation entity · a capital gains tax (CGT) event happens to an asset you own · the CGT event happened after 11.45am (by legal time in the ACT) on 21 September 1999 · you acquired the asset at least 12 months before the CGT event, and · you did not choose to use the indexation method. Under the discount method you reduce your capital gain by the discount percentage. For individuals, the discount percentage is 50%. However, you can reduce the capital gain only after you have applied all the capital losses for the year and any unapplied net capital losses from earlier years. The discount capital gain is included in your assessable income and taxed at the marginal rate applicable to that income for that year. In your case, as you are an individual who has owned the property for more than 12 months and the sale of the property (a CGT event) will occur after 21 September 1999, you are able to discount capital gain where the sale of the property results in a capital gain.