Document ID: chunk:federal_register_of_legislation:C2025C00029:section:3:p26
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 3 (pt 26/34)
Character Range: 1725916–1728792

income year
100‑50 How to work out your net capital gain or loss
100‑55 How do you comply with CGT?

Keeping records for CGT purposes
100‑60 Why keep records?
100‑65 What records?
100‑70 How long you need to keep records

100‑5  Effect of this Division
  This Division is a *Guide.
Note: In interpreting an operative provision, a Guide may be considered only for limited purposes: see section 950‑150.

100‑10  Fundamentals of CGT
 (1) CGT affects your income tax liability because your assessable income includes your net capital gain for the income year. Your net capital gain is the total of your capital gains for the income year, reduced by certain capital losses you have made.
See later in this Guide (section 100‑50) for more detail.
 (2) When you prepare your income tax return, you need to check whether you have made any capital gains for the income year.
  You also need to check whether you have made any capital losses. You cannot deduct a capital loss from your assessable income, but it will reduce your capital gain in the current income year or later income years.
 (3) You will also need to consider the impact of CGT when doing your financial planning. In particular, you will need adequate record‑keeping to deal most effectively with any immediate or future CGT liability.
  To give you a sense of the range of things affected by CGT, if you are involved with any of the following, you may have a CGT liability now or at some time in the future:

      * • leases                       * • marriage or relationship breakdown
      * • inheritance                  * • working from home
      * • subdividing land             * • shares
      * • goodwill                     * • a civil court case
      * • contracts                    * • trusts
      * • options                      * • bankruptcy
      * • a company liquidation        * • incorporating a company
      * • leaving Australia

100‑15  Overview of Steps 1 and 2

Note: Capital proceeds and cost base are not relevant for some CGT events, for example CGT event K7 or any of the CGT events created by Subdivision 104‑L.

Step 1—Have you made a capital gain or a capital loss?

100‑20  What events attract CGT?
 (1) You can make a capital gain or loss only if a CGT event happens.
 (2) There are a wide range of CGT events. Some happen often and affect many different taxpayers. Others are rare and affect only a few.

Some examples of CGT events
Situation                                                  Event                                                                            Which CGT event?
You own shares you acquired on or after 20 September 1985  You sell them                                                                    CGT event A1
You sell a business                                        You agree with the purchaser not to operate a similar business in the