Capital Gains
4. Capital Gains Tax Events
Authors: Whitehead Michelle
Firm / Chambers:
Last updated: 13 Sep 2015
- A CGT event is most commonly the sale or disposal of a CGT asset. It is the point at which the capital gain or loss is made.
- It can sometimes be complicated working out when a CGT event occurs. For example if you enter into a contract for the sale of a CGT asset the CGT event occurs when the contract is executed rather than when settlement occurs.
- If a CGT asset is disposed of without a contract the CGT event occurs when you stop being the owner of the asset.
- In the event that a CGT asset is lost or destroyed and you receive compensation the CGT event occurs when the compensation is first paid to you. However if you do not receive compensation then the CGT event occurs when the destruction occurs or when you discover your loss.
- If you stop being an Australian resident for tax purposes this is a CGT event. You will be deemed to have disposed of any assets you hold that are not taxable Australian property (such as land held overseas) at their market value.
- A CGT event also occurs:
- when you cancel or surrender a CGT asset such as a lease or a licence;
- when shares are cancelled, surrendered, redeemed or declared worthless;
- when you exercise an option under a contract or in some cases when you are granted an option under a contract;
- when you execute a contract creating contractual or other rights;
- when you create a trust over a CGT asset or transfer a CGT asset to a trust;
- when you convert a trust to a unit trust; and
- when you receive a capital payment for an interest in a trust.
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