Work out what a capital gain or loss on an asset sale could add to your taxable income, and see how the CGT discount may reduce it.
Capital gains tax is not a separate tax rate. A net capital gain is generally included in assessable income and taxed as part of the taxpayer’s income tax position. Working out the result can involve sale proceeds, the asset’s cost base, incidental acquisition and disposal costs, capital losses and any CGT concessions that are available.
For the 2026–27 income year, eligible Australian resident individuals and trusts may generally access the 50% CGT discount on qualifying assets held for at least 12 months. Companies are not entitled to the general CGT discount. However, enacted reforms change the CGT treatment of gains from 1 July 2027, so estimates for later income years need to apply the rules in force at that time. Special rules can also apply to property, inherited assets, foreign residency and small business concessions.
Get clear answers on cost base, discounts, losses and common CGT assumptions.
The cost base can include the amount paid to acquire the asset plus certain incidental costs and eligible ownership or capital costs. The exact components depend on the asset and the CGT rules, so not every expense connected with an asset automatically forms part of the cost base.
Under the rules applying for 2026–27, eligible Australian resident individuals and trusts may generally access the 50% CGT discount on qualifying gains where the asset has been held for at least 12 months. Different CGT rules apply from 1 July 2027, so later-year calculations should use the rules applying to that income year.
No. Companies are not eligible for the general 50% CGT discount. A company’s capital gain is worked out under the applicable CGT rules and forms part of its taxable income.
Generally, no. Capital losses are applied against capital gains rather than salary, wages or other ordinary income. Unused net capital losses can generally be carried forward for use against future capital gains, subject to the rules that apply.
Not necessarily. The main residence exemption may fully or partly disregard a capital gain where the relevant conditions are met. Periods of income-producing use, absence rules, land size and other circumstances can affect the outcome.
Talk to SMH Accountants & Advisors before settlement or disposal to understand the CGT implications, records and concessions that may be relevant.
