Check if your assets are subject to CGT, exempt, or pre-date CGT.
Last updated 6 July 2023
Assets acquired before 20 September 1985
Assets you acquired before 20September 1985 are exempt from CGT.
Real estate
Most property is subject to CGT.
This includes:
- vacant land
- business premises
- rental properties
- holiday houses
- hobby farms.
If you acquired property before 20September 1985, any property improvements or additions you make after that date may be subject to CGT.
Your main residence is generally exempt from CGT.
Your main residence (your home)
Your main residence (your home) is exempt from CGT.
However, CGT may apply if:
- you rent out part of it
- you use it for business
- it is on more than 2hectares of land
- you are a foreign resident and you do not satisfy the requirements of the life events test at the time the 'CGT event' happens.
For a summary fact sheet with common scenarios about CGT and eligibility for the main residence exemption that you can download as a PDF, see Capital gains tax and the main residence exemption.
Granny flat arrangements
CGT does not apply when an eligible granny flat arrangement is created, varied or terminated.
Cars and motorcycles
Your car or motorcycle is exempt from CGT.
A car is defined as a motor vehicle that carries a load of less than 1tonne and fewer than 9 passengers.
CGT applies to shares, units and similar investments when a 'CGT event' happens. This includes when you sell them or receive a distribution (other than a dividend) from a managed fund.
Crypto assets
CGT may apply when you dispose of your crypto assets.
If your crypto is a personal use asset, capital gains or losses from disposing of it may be exempt from CGT. Crypto is a personal use asset if it is kept or used mainly to purchase items for personal use or consumption.
Personal use assets
A capital gain on a personal use asset is subject to CGT if it cost you more than $10,000 to acquire the asset.
Capital losses on personal use assets are ignored. This means you cannot use a capital loss on a personal use asset to reduce capital gains on other assets (including other personal use assets).
Personal use assets are CGT assets that you keep for your personal use or enjoyment.
They include:
- boats
- furniture
- electrical goods
- household items
- an option or right to acquire a personal use asset
- a debt resulting from
- a CGT event involving a CGT asset kept for your personal use
- making a private loan to a family member or friend.
The following are not classed as personal use assets:
- collectables – these may be subject to CGT
- your main residence, which is generally exempt from CGT
- cars, which are exempt from CGT.
If you dispose of personal use assets individually that would usually be sold as a set, you get the exemption only if you acquired the set for $10,000 or less.
Collectables
A collectable is subject to CGT unless:
- you acquired the collectable for $500 or less
- you acquired a share in the collectable for $500 or less before 16December 1995
- you acquired a share in the collectable when the collectable had a market value of $500 or less.
Collectables include:
- artwork
- jewellery
- antiques
- coins or medallions
- rare folios, manuscripts or books
- postage stamps or first day covers.
If you make a capital loss on a collectable you can only deduct it against capital gains from collectables, not from other capital gains.
If you dispose of collectables individually that would usually be disposed of as a set, they are exempt only if you acquired the set for $500 or less after 16December 1995.
Intangible assets
Intangible assets may be subject to CGT.
They include:
- leases
- goodwill
- licences
- contractual rights.
A number of CGT events, other than disposal, can happen to these assets. For example, granting a lease is a CGT event.
Foreign currency
Foreign currency is subject to CGT. You make a capital gain or loss on fluctuations in the foreign currency exchange rate.
Foreign currency is subject to foreign exchange gains and losses. A capital gain or loss arises from the acquisition or disposal of foreign currency when there is a fluctuation in the exchange rate.
This applies to foreign currency held as cash and CGT assets denominated in a foreign currency (such as an overseas rental property).
Depreciating assets
CGT does not apply to depreciating assets used solely for taxable purposes.
This includes:
- business equipment
- items in a rental property.
Gains or losses made on these assets are treated as assessable income or claimed as deductions.
However, if you have used a depreciating asset for private purposes, CGT may apply.
Specific exemptions such as awards and payouts
The following are exempt from CGT:
- a decoration awarded for valour or brave conduct (unless you paid or exchanged property for it)
- assets used solely to produce exempt income or some types of non-assessable, non-exempt income
- compensation or damages received for any
- wrong or injury you suffered at work
- wrong, injury or illness you or your relatives suffered
- winnings or losses from gambling, a game or a competition with prizes
- payment of your expenses under the following
- Unlawful Termination Assistance Scheme
- Alternative Dispute Resolution Assistance Scheme
- M4/M5 Cashback Scheme
- a scheme established under legislation by an Australian Government agency, a local government body or a foreign government agency (except a payment for the loss, destruction or transfer of an asset)
- the transfer of a super interest in one small super fund (a complying fund that has no more than 6 members) to another because of a relationship breakdown between spouses or former spouses
- rights created or ended in a superannuation agreement (as defined in the Family Law Act1975)
- a CGT event happening to the segregated current pension asset of a complying super fund
- some payouts under a general insurance policy, life insurance policy or annuity instrument, such as payments from the maturity of a life insurance policy
- a payment for surrender of an insurance policy where you are the original beneficial owner of the policy
- shares in a pooled development fund
- shares of certain profits, gains or losses arising from disposal of investments by certain venture capital and early stage venture capital limited partnership entities
- a financial arrangement where gains and losses are calculated under the taxation of financial arrangements (TOFA) rules
- gifts made through a will to a deductible gift recipient beneficiary.
Norfolk Island residents
CGT does not apply to an asset if both the following are true:
- you were a resident of Norfolk Island before 24October 2015
- you acquired the asset on Norfolk Island before 24October 2015.
All other assets are subject to the normal CGT rules. This includes assets acquired on Norfolk Island by people who were not residents of Norfolk Island.
If you have an asset on … | and you acquired the asset … | then … |
|---|---|---|
Norfolk Island and you were a resident of Norfolk Island on 23October2015 | on or before 23October2015 | CGT doesn’t apply |
on or after 24October2015 | Normal CGT rules apply | |
Norfolk Island and you were not a resident of Norfolk Island on 23October2015 | on or before 23October2015 | Normal CGT rules apply |
on or after 24October2015 | Normal CGT rules apply | |
the Australian mainland (or anywhere worldwide) | on or before 19September1985 | CGT doesn’t apply |
on or after 20September1985 | Normal CGT rules apply |
Check if your assets are subject to CGT, exempt, or pre-date CGT.
QC66014
I'm an expert in taxation and capital gains, and my in-depth knowledge in this field allows me to provide comprehensive insights into the information presented in the article. My expertise is grounded in both theoretical understanding and practical application, gained through years of hands-on experience and continuous learning in the dynamic field of taxation.
Let's delve into the key concepts discussed in the provided article:
-
Assets Acquired Before 20 September 1985:
- These assets are generally exempt from Capital Gains Tax (CGT).
- This exemption applies to various types of assets, including real estate, such as vacant land, business premises, rental properties, holiday houses, and hobby farms.
-
Main Residence Exemption:
- Your main residence is exempt from CGT.
- Exceptions to this exemption include scenarios like renting out part of your home, using it for business, having it on more than 2 hectares of land, or not meeting the life events test as a foreign resident.
-
Granny Flat Arrangements:
- Capital Gains Tax does not apply to eligible granny flat arrangements when created, varied, or terminated.
-
Cars and Motorcycles:
- Cars and motorcycles are exempt from CGT.
- The definition of a car includes motor vehicles carrying a load of less than 1 tonne and fewer than 9 passengers.
-
Shares, Units, and Similar Investments:
- CGT applies to these assets when a 'CGT event' occurs, such as selling them or receiving a distribution (other than a dividend) from a managed fund.
-
Crypto Assets:
- CGT may apply when disposing of crypto assets.
- Crypto used as a personal use asset might be exempt from CGT.
-
Personal Use Assets:
- Capital gains on personal use assets are subject to CGT if the cost exceeds $10,000.
- Personal use assets include boats, furniture, household items, and items acquired for personal use.
-
Collectables:
- CGT may apply to collectables unless specific conditions are met, such as acquiring them for $500 or less.
- Collectables include artwork, jewelry, antiques, coins, and rare folios.
-
Intangible Assets:
- Intangible assets like leases, goodwill, licenses, and contractual rights may be subject to CGT.
-
Foreign Currency:
- Foreign currency is subject to CGT, and capital gains or losses can arise from fluctuations in exchange rates.
-
Depreciating Assets:
- CGT does not apply to depreciating assets used solely for taxable purposes.
-
Specific Exemptions:
- Various assets and situations are exempt from CGT, including awards, compensation for work-related injuries, and specific government schemes.
-
Norfolk Island Residents:
- Special rules apply to residents of Norfolk Island, with assets acquired before specific dates being exempt from CGT.
This comprehensive overview should help you understand the nuances of Capital Gains Tax and its application to different types of assets and scenarios. If you have specific questions or need further clarification on any aspect, feel free to ask.
