Item 18 - Capital gains

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.

Using the ‘g’ worksheet will automatically calculate all Capital Gains and Losses and integrate values to labels G, M, A, H, and V.

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.

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.

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

If the answer is YES you must complete all relevant labels.

You must complete and lodge a current year Capital gains schedule (BW) if your total current year capital gains or losses are more than $10,000. This includes if you received a distribution from a trust (including a managed fund) that has a net capital gain.

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.

Label M - Have you applied an exemption or rollover or additional discount?

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

Exemption / Rollover Code

If you have applied more than one exemption, then select the code from the drop down list that reflects the largest $ value of those exemptions.

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 $750,000 (down from $2 million in the previous income year) 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 percent under either the CGT discount or the small business 50 percent 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 percent under both the CGT discount and the small business 50 percent 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.)

Affordable housing incentive

Individuals may invest by holding an ownership interest in affordable housing directly or through trusts (other than public unit trusts and superannuation funds), MITs and partnerships

Affordable housing CGT discount applies only to individuals.

To qualify for the additional discount housing must be provided at below-market rent and made available for eligible tenants on low to moderate incomes. Tenant eligibility will be based on household income thresholds and household composition.

A dwelling is used to provide affordable housing if the following conditions are satisfied:

residential premises — the dwelling is a taxable Australian real property (TARP) and is residential premises that is not commercial residential premises and is tenanted or available to be tenanted;
property management — the tenancy of the dwelling or its occupancy is exclusively managed by an eligible community housing provider and is let out below the market rate;
providing affordable housing certification — the eligible community housing provider has given each entity that holds an ownership interest in the dwelling certification that the dwelling was used to provide affordable housing;
National Rental Affordability Scheme (NRAS) — no entity that has an ownership interest in the dwelling is entitled to receive an NRAS incentive for the NRAS year; and
Managed investment trust (MIT) membership — if the ownership interest in the dwelling is owned by a MIT the tenant does not have an interest in the MIT that passes the non-portfolio test

Registered Community housing provider (CHP)

The affordable housing must also be managed through a registered community housing provider (CHP) and the investment held as affordable housing for a minimum period of three years (1,095 days) after 1 January 2018. It may be a continuous period or an aggregation of periods totaling three or more years.

CHPs must issue an affordable housing certificate by 31 July to each entity. The certificate must:

show the ownership interest in an affordable housing dwelling for each entity and
the number of days it was used for affordable housing during the income year.

CHPs are required to lodge an annual report to the ATO with details of the affordable housing certificates they issued during the income year. The first annual report covering the 2020-21 income year is required to be lodged by 31 July 2021. CHP’s have been exempted from reporting for income years 2018-19 and 2019-20. The additional discount will be pro-rated for periods where the property is not used for affordable housing purposes.

Read more about it on the ATO's website.