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Item 18 - Capital gains

Refer to Item 18 - Capital gains on the ATO website.

Use the Capital gains worksheet (g) to calculate the capital gain or loss on disposal of the asset. Enter the acquisition and disposal details and any other details concerning the asset transaction including a percentage to be shared with another person.

Where an ATO Capital Gains schedule (BW) is required to be completed and lodged, tick the Populate BW checkbox in the CGT Index and MYOB Tax will accumulate all the values and populate the BW schedule.

Using the ā€˜gā€™ worksheet will automatically calculate all Capital Gains and Losses and integrate values to labels A, H and V.

Label G - Did you make a capital gain or capital loss during the year?

 If the answer is YES the relevant amounts for total capital gains and net capital gains must be entered and if the capital gain or capital loss exceeds $10,000, a PLS Capital Gains schedule must be completed and lodged with the return.

Use the Tax Capital gains worksheet (g) to calculate the gain or loss for each asset disposal or for distributions of capital gain from trusts. Prior year losses, reductions, exemptions, etc. will be calculated and the correct values returned at the relevant labels in the return.

From 1 July 2017, if you are a Norfolk Island resident, CGT may now apply to assets acquired after 23 October 2015. CGT remains payable on Australian mainland assets. For more information see Special capital gains tax rules for Norfolk Island residents on the ATO website.

If you are an investor who acquired newly issued shares in a qualifying early stage innovation company on or after 1 July 2017, any capital gains made on these shares from a CGT event that takes place in 2017-18 will be subject to ordinary CGT treatment. However, you must disregard any capital losses made on these shares from a CGT event that takes place in 2017-18.

Label M - Have you applied an exemption or rollover?

Answer the question Y if an exemption or rollover has been applied to any CGT event.

Exemption / Rollover Code

From 1 July 2017, two new codes have been introduced to deal with the gain or loss made from Investments in early stage investment company and venture capital limited partnership:

  • Code U: Early stage investor subdivision 360A
  • Code V: Venture capital investment subdivision 118F.

If more than one CGT event occurred and the Gain was rolled over or an exemption applied to it, then choose the code that reflects the largest of those transactions.

Label A - Net capital gain

If the Tax Capital gains worksheet (g) is used, the Net capital gain will be calculated by the worksheet as the sum of all transactions, less prior year losses, discounts, exemptions and rollovers.

Alternatively, if the amount is already known it can be keyed directly at the label.

Label H - Total current year capital gains

If the Tax Capital gains worksheet (g) is used this amount will be calculated as the sum of all transactions prior to applying capital losses, CGT discounts or the small business concessions, other than the 15 year exemption and exemption for part year residency on sale of a rental property.

Label V - Net capital losses carried forward to later income years

If the Tax Capital Gains worksheet (g) is used, this amount will be calculated as the sum of all current year unapplied capital losses from Collectables and Other assets, plus any unapplied prior year losses at the beginning of the year for both categories of assets. Although the ATO does not require a breakdown of Capital losses carried forward, Tax keeps those losses in their correct categories for roll over to the next year.

If the taxpayer is an Australian resident, capital gains or capital losses made from foreign sources must be included at this item and NOT at the foreign source income item 20.

Label X - Credit for foreign resident capital gains withholding (FRCGW)

Under the FRCGW rules, foreign residents disposing of certain Australian assets may have an amount withheld from the sales proceeds they receive.

Similarly, Australian resident vendors could have amounts withheld from their sale proceeds if they:

  • dispose of Australian real property with a market value of $2 million or more, without providing the purchaser with an ATO-issued clearance certificate, or

  • dispose of an indirect Australian real property interest without providing the purchaser with a valid vendor declaration (resident).

If you have had amounts withheld from you during the year, you are entitled to claim a credit for those amounts paid to the Commissioner by the withholder. You claim that credit at label X.

If the taxpayer's share of any net capital gain received from a trust estate is included at this field, you need to consider the following:

  • If the net capital gain has been reduced by 50 per cent under either the CGT discount or the small business 50 per cent active asset reduction (but not both), you must 'gross up' the taxpayer's share by multiplying their share of the net capital gain amount by 2.

  • If the net capital gain has been reduced by 50 per cent under both the CGT discount and the small business 50 per cent active asset reduction, you must 'gross' it up by multiplying the taxpayer's share of the net capital gain amount by 4. (Refer to Subdivision 115-C ITAA of 1997.)

Any payments from the trustee out of the CGT discount amount and/or an active asset reduction amount are 'tax-deferred amounts'. If the trust estate is a unit trust or a fixed trust and the tax-deferred amount exceeds the cost base of the units or fixed interests in the trust, the taxpayer makes a capital gain equal to the excess.


CCH References

11-000 Overview of the capital gains tax provisions

11-030 Net capital gain assessable

11-033 Discount capital gains

11-037 Proposed discount for qualifying affordable housing

11-040 Net capital losses

11-240 Overview of the CGT events

11-380 What is a CGT asset?

11-390 Collectables

11-400 Personal use assets

11-410 Separate CGT assets

11-440 General CGT acquisition rules

11-500 General rules for capital proceeds

11-550 Cost base

11-560 Reduced cost base

11-640 Assets exempt from CGT

11-730 Basic concepts of main residence exemption

12-037 Types of roll-overs

22-072 Capital gains withholding regime for foreign residents

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