Item 21 - Capital Gains

At item 21 the income tab provides these Capital Gains labels:

Label G - Did you have a CGT event during the year?

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 ‘g’ worksheet will automatically calculate all Capital Gains and Losses and integrate values to the following labels in the return.

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.

CODE

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.

From 1 July 2016, use the new code T if you have either received or disposed of an asset under the Small business restructure roll-over provisions.

Quick access to Tax Office CGT schedule?

Type Y at this question and click [Enter] to open the ATO Capital Gains Schedule.

If you are using the Capital gains worksheet (g), enter all the Asset disposals prior to opening the BW. Refer to Capital gains schedule (BW).

Generally, a trust makes a capital gain or capital loss if certain events or transactions - called CGT events - happen. Most commonly, CGT events happen to a trust's CGT assets - for example, the disposal of a CGT asset - while other CGT events relate directly to capital receipts (capital proceeds).

An Australian resident company makes a capital gain or capital loss if a CGT event happens to any of its world-wide CGT assets. Foreign residents are only subject to CGT if a CGT event happens to assets which have the necessary connection with Australia if the CGT event happened to assets that are taxable Australian property.

Foreign trusts and CGT events

A capital gain or capital loss from a CGT event may be disregarded if the trust is a foreign trust just before the CGT event happens, if it happens in relation to a CGT asset that is not taxable Australian property. See section 855-10 of the ITAA 1997.

A CGT event in relation to an interest in a fixed trust held by a beneficiary who is a foreign resident may not be subject to CGT if at least 90% of the assets of the fixed trust, directly or indirectly through a chain of fixed trusts in which the fixed trust has an indirect or direct interest, are not taxable Australian property at the time of the CGT event (see section 855-40). If you are the trustee of such a fixed trust, you may need to attach sufficient additional information to the statement of distribution provided to the beneficiaries, to enable them to work out their CGT position.

Include amounts giving rise to the foreign resident capital gains withholding at label A item 21.

Credit for amounts of foreign resident capital gains withholding

From 1 July 2017, the foreign resident capital gains withholding measure applies. The purchasers of certain taxable Australian property owned by relevant foreign residents are required to withhold 10 per cent from the purchase price of the property and remit it to the ATO. The relevant foreign resident claims a credit for the foreign resident capital gains withholding amount.

Include the amount of foreign resident capital gains withholding at B item 21.

CGT worksheets and schedules

If the trust ceases to hold or use a depreciating asset which was used for both taxable and non-taxable purposes, a CGT event may happen to the asset. A capital gain or capital loss attributable to that non-taxable use may arise.

You do NOT need to complete a Capital Gains Schedule (BW) if the trust was a subsidiary member of a consolidated group at the end of the income year and has completed label Z2 Consolidated subsidiary member at item 2.

In other cases, complete the Capital Gains Schedule (BW) and lodge it with the 2018 Trust tax return if:

ACGT event occurs in relation to a forestry managed investment scheme interest that is held other than as an initial participant
The trust's total current year capital gains for the income year are greater than $10,000
The trust's total capital losses for the income year are greater than $10,000.

For more information about CGT events, refer to the Guide to capital gains tax on the ATO website.

Label A - Net capital gain

The trust's net capital gain is the total capital gains it made for the income year reduced by current year capital losses, prior year net capital losses, CGT discount and any other relevant concessions. Relevant concessions are the small business CGT:

50% active asset reduction
Retirement exemption
Rollover relief.

Show at label A the amount of the trust's net capital gain.

For more information on how to calculate the trust's net capital gain, refer to the Guide to capital gains tax on the ATO website. For information about the small business concessions, refer to the Guide to capital gains tax concessions for small business (NAT 83840) and Advanced guide to capital gains tax concessions for small business (NAT 3359), available on the ATO website.

Record any unapplied net capital losses at item 27. The trust may need to complete a losses schedule (BP). Refer to the ATO Losses schedule instructions for the current income year.

Label B - Credit for amounts of foreign resident capital gains withholding amounts

From 1 July 2016, the foreign resident capital gains withholding measure applies. The purchasers of certain taxable Australian property owned by relevant foreign residents are required to withhold 10 per cent from the purchase price of the property and remit it to the ATO. The relevant foreign resident claims a credit for the foreign resident capital gains withholding amount.

For more information, see Foreign resident capital gains tax withholding on the ATO website.

Include the amount of foreign resident capital gains withholding at label B item 21.

Excepted net capital gain of a minor

Include the amount of any excepted net capital gain of a minor at label A and attach a statement to the trust tax return:

Detailing the distribution of excepted net capital gains to each beneficiary, and
Listing each beneficiary who is considered to be an excepted person, giving supporting reasons.

For an explanation of excepted income and excepted person, refer to CGT exemption or roll-over codes on the ATO website.

CCH References

11-030 Net capital gain assessable

11-040 Net capital losses

11-060 Net capital gains of trusts

22-072 Capital gains withholding regime for foreign residents