Week 8: CGT

Question 1

What does CGT events trigger?

Answer 1

Capital gains and capital losses

Question 2

What is a CGT Asset (s108-5)

Answer 2

Any kind of property

A legal or equitable right that is not property

Question 3

What are 4 examples of CGT assets?

Answer 3

Land
Shares
Options
Goodwill

Question 4

What is the difference between collectables and Personal Use Asset?

Answer 4

Collectable- personal use/enjoyment i.e. artwork, jewellery

PUA = CGT asset except collectable, NOT including land/buildings: includes house, boat, caravan

Question 5

Capital losses from collectables can only be applied _________

Answer 5

against capital gains from collectables

Question 6

When are capital gains and capital losses disregarded for collectables?

Answer 6

if collectables acquired for $500 or less

Question 7

How are capital losses treated for PUA?

Answer 7

Capital losses disregarded

Question 8

When are capital gains disregarded for PUA?

Answer 8

acquired for $10,000 or less

Question 9

What is CGT event A1?

Answer 9

where taxpayer ‘disposes’ of a ‘CGT asset’

Question 10

How to calculate capital gain?

Answer 10

Capital proceeds - asset’s cost base

Question 11

How to calculate capital loss?

Answer 11

Assets reduced cost base - capital proceeds

Question 12

What element is NOT part of the reduced cost base?

Answer 12

3rd element: cost of owning the asset

Question 13

Net capital loss _____ be claimed as a deduction

Answer 13

cannot

Question 14

What can you do with net capital loss?

Answer 14

Can be carried forward to offset against capital gains in future years

Question 15

What is CGT event A1?

Answer 15

Arises if whole or part of a CGT asset is lost or destroyed

Question 16

What is CGT event D1?

Answer 16

Arises if a contractual right or some other legal or equitable right is created in another entity (eg restrictive covenants or exclusive trade ties)