CGT discount, anti-overlap rule and minor CGT exemptions

Capital gains made on assets disposed of after 11:45 am (ACT time) on 21 September 1999 may be reduced by the discount capital gains tax (CGT) concession in Div 115 of the Income Tax Assessment Act 1997 (Cth) (ITAA 1997).

Authored by Greg Vale, Solicitor Director, Vale Legal and John Gaal, TaxCounsel. Updated by the LexisNexis Legal Writer team.

CGT discount

Capital gains made on assets disposed of after 11:45 am (ACT time) on 21 September 1999 may be reduced by the discount capital gains tax (CGT) concession in Div 115 of the Income Tax Assessment Act 1997 (Cth) (ITAA 1997).

What is the discount capital gain concession?

The CGT discount concession allows certain taxpayers who make a capital gain from a CGT asset held for more than 12 months to include only part of the nominal capital gain (being that amount of the gain excluding any indexation) in its assessable income.

The two criteria which must be satisfied are that:

• the gain must be made by an eligible taxpayer; and
• the gain must arise from a CGT event happening to an asset held for the qualifying period of time.

Who is entitled to claim the CGT discount?

For the capital gains discount concession to be available, the capital gain must be made by an individual, a complying superannuation entity or a trust.

The general capital gains discount concession cannot be claimed by foreign or temporary resident taxpayers in respect of assets acquired after 8 May 2012. The discount is apportioned if the foreign or temporary resident acquired the asset before 9 May 2012 or had a period of Australian residency after that date.