What is a CGT Asset?

CGT Assets are defined in s 108-5 of the Income Tax Assessment Act 1997 as "any kind of property" or "a legal or equitable right that is not property."

Specific examples of CGT assets listed in the legislation include:

• land and buildings;
• shares in a company and units in a unit trust;
• options;
• debts owed to you;
• a right to enforce a contractual obligation;
• foreign currency.

Most often, a tax payer will be faced with a capital gains tax bill on the sale of shares or real property. Before disposing of any property, taxpayers should be aware of the CGT implications, paying particular attention to the CGT holding rule which may entitle a taxpayer to a CGT discount.

Collectables

Collectables for CGT purposes are mainly kept for personal use or enjoyment and include artwork; jewelry; antiques; coins; medallions, rare folios, books or manuscripts; and postage stamps. Losses from the disposal of collectables cannot be used to offset against other capital gains. They must be only be offset against gains from the disposal of other collectables.

Unit Trusts

A unit holder does not have an interest in the underlying property of a unit trust for CGT purposes. It is only the unit itself that is a CGT asset to the taxpayer.

Personal Use Assets

Personal use assets is a CGT asset that is kept mainly for the personal use of the taxpayer, and is not a collectable. If it is acquired for less than $10,000 it is not subject to CGT on its disposal.

There are a number of exempt assets including main residence exemption.