CGT Exemptions

Exempt Assets Car, motor cycle or similar vehicle. a car is a motor vehicle designed to carry a load of less than one tonne and less than 9 passengers (Case J63). Decorations for valour capital gain or loss from a decoration awarded for valour or brave conduct is ignored, unless it was purchased by the taxpayer. Collectables costing $500 or less gain or loss ignored if the first element of the cost base is $500 or less (excluding any input tax credit for the acquisition). If collectable is an interest in artwork, jewellery, an antique, a coin or medallion, a rare folio, manuscript or book, a postage stamp or first day cover - it is the market value of the asset that determine whether the exemption applies. Eg. If 20% interest is acquired for $400, the asset is worth $2,000 therefore exemption does not apply. (this rule does not apply to interest acquired before 16 Dec 1996)

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Certain personal use assets - capital gain from PUA or part of, is exempt if the first element is $10,000 or less (excluding any input tax credit on acquisition) - capital loss from disposal of shares in a company or an interest in trust does not result in capital loss to the extent that the loss relates to a decline in value of a personal use asset owned by the company or trust. Assets used to produce exempt income gain or loss from a CGT asset used to solely produce exempt income or non-assessable nonexempt income is ignored. Gain or loss resulting from disposal of shares in PDF is disregarded Compensation or damages received for any wrong or injury suffered in occupation Compensation or damages for any wrong, injury or illness suffered personally, eg. Slander, defamation and insurance money under personal accident policies gambling, game or competition with prizesetc Receipt of a right or entitlement to a tax offset, a deduction, or other similar benefit Leases not used for income-producing purposes

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Strata title conversion if owns land on which there is a building;

(a) the builiding is subdivided into stratum units and (b) each unit is transferred to the entity who had the right to occupy it just before the subdivision capital gain or loss from transfer of units disregarded Sale, transfer or assignment of rights to mine in area in Australia is disregarded if you have exempt income for the whole year from the sale, transfer or assignment. Foreign currency hedging contracts a capital gain/loss from a hedging contract is ignored for CGT purposes Gifts of property testamentary gift of property under: (a) the Cultural Bequests Program (b) testamentary gift deductible under s 30-15 if it had not been testamentary gift after 2005/06 do not have to value more than $5,000 to qualify for exemption). (c ) gift of property under Cultural Gifts Program Marriage or relationship breakdown settlements No CGT liabilities for: - marriage or relationship breakdown settlement or - with effect from the 2009/10 income year, settlements from the breakdown of relationship bw spouses (including same sex couples) For CGT evens happening after 12 Dec 2006, a capital loss or gain that resulting from CGT event C2 happening to a right is disregarded if: (a) that gain/loss is made in relation to a right that directly relates to the breakdown of a marriage (including de facto) or, (b) from the 2009/10 income year, relates to the breakdown of a relationship between spouses AND (c ) at the time of the trigger of the event, the spouses involved are separated and there is no reasonable likelihood of cohabilitation being resumed; AND (d) the trigger event happened because of reasons directly connected with marriage breakdown or, from 09/10 income year, the relationship breakdown Exempt taxpayers If assessable income is exempt during the income year, any capital gains are also exempt. A capital loss is ignored if it was an exempt entity at the time that it made the loss, despite not being an exempt entity during the whole year.

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OTHER ANTI-OVERLAP PROVISIONS

Exempt Assets Carried interests

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Carried interests that is CGT event K9 received by venture capital manager is taxed as a capital gain. Depreciating assets a capital gain/loss may be disregarded if it arises from CGT event that happens to a depreciating asset, except: - CGT event J2 and K7. - CGT event is not equivalent to a balancing adjustment event; - various primary production assets deductible under Subdiv 40-F or G eg. Water facilities, horticultural plants & grapevines, landcare operations, electricity connections and telephone lies. Trading stock capital gain/loss is disregarded for CGT purpose Financial arrangements - a capital gain/loss is disregarded if at the time of CGT event, the asset is or is part of, a financial arrangement to which Subdiv 250-E applies - a capital gain/loss a taxpayer makes form a CGT asset, in creating a CGT asset or from the discharge of a liability will generally be disregarded if it was part of a Div 230 financial arrangement and ther is an assesable gain or deductible loss pursuant to Div 230

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Film copyright exemption a capital gain/loss from a CGT event relating to an interest in the copyright of a film is ignored if the amount is assessable under ITAA36 s 26AG because of the CGT event, or would be so assessable apart from ITAA36 s 23H. R&D exemption a capital gain/loss from a CGT event is ignored if an amount is assessable under specified R&D provisions because of that CGT event
Tax Law Amendment (Research and Development) Bill 2010)

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CGT REDUCTION
Amount included in taxpayer's assessable income or exempt income A capital gain is reduced if, because of CGT event giving rise to it, a provision of the Act (other than CGT) includes the amount in: - assessable income or exempt income - if in a partnership, the amount is included in assessable or exempt income of the partnership. Discharge of debt Reduction also apply to discharge of debt arosing from provision of services and the income from those services was previously included in the taxpayer's assessable or exempt income.
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Receipt of retail premium Capital gain made by non-participating shareholder from receipt of a retail premium is reduced to the extent that the amount is included in the taxpayer's assessable or nonassessable non-exempt income

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For other reductions see Master Tax Guide page 566