Capital Gains Tax Indexation and 50% Discount for Individuals

Capital Gains Tax Indexation and 50% Discount for Individuals

Where an individual acquired a capital gains tax (CGT) at least 12 months before the CGT event, the rules for calculating the capital gain are as follows:

Asset acquired at or before  and CGT event  occurred after 11.45am on 21 September 1999

Rules: The individual taxpayer has the choice of including in assessable income the capital gain that results from either

• the capital gain with a cost base which includes indexation frozen at 30 September 1999, or
• the capital gain without indexation and then reducing the notional capital gain by the CGT discount (50% for individuals).

Asset acquired and CGT event occurred after 11.45am on 21 September 1999

Rules: The non-indexed gain is reduced by the CGT discount which is 50% for individual taxpayers.

Asset was owned for less than 12 months

In the examples above, the individual had acquired the asset at least 12 months before the CGT event. If the asset was acquired less than 12 months before the CGT event then indexation does not apply, and for CGT events happening after 11.45 am on 21 September 1999, the 50% option is not available.