who wants to call the close, page-42

No prob's Stevenjd,

I've just realised that the link may not have worked so here it is direct from the ATO.

The discount method of calculating your capital gain

When can the discount method be used?
You can use the discount method to calculate your capital gain if:

you are an individual, a trust or a complying superannuation entity

a capital gains tax (CGT) event happens in relation to an asset you own

the CGT event happened after 11.45am (by legal time in the ACT) on 21 September 1999

you acquired the asset at least 12 months before the CGT event, and

you did not choose to use the indexation method
In determining whether you acquired the CGT asset at least 12 months before the CGT event, you exclude both the day of acquisition and the day of the CGT event.

There are certain exceptions to the 12-month ownership requirement – read Calculating your capital gain or loss for more information.

Generally, the discount method does not apply to companies, although it can apply in relation to a limited number of capital gains made by life insurance companies.

Example

CGT discount method

Sally acquired a CGT asset on 2 February 2006. Sally is entitled to apply the CGT discount if a CGT event happens to that asset on or after 3 February 2007.In certain circumstances, you may be eligible for the CGT discount even if you have not owned the asset for at least 12 months. For example:

if you acquire a CGT asset as a legal personal representative or as a beneficiary of a deceased estate – the 12-month requirement is satisfied if the asset was acquired by the deceased:
before 20 September 1985 and you disposed of it 12 months or more after they died, or
on or after 20 September 1985 and you disposed of it 12 months or more after they acquired it

if you acquired an asset as the result of a marriage breakdown and rollover applies (see Marriage breakdown rollover) – you will satisfy the 12-month requirement if the combined period your spouse and you owned the asset is more than 12 months, and

if a CGT asset is compulsorily acquired, lost or destroyed and you acquire a rollover replacement asset, you will satisfy the 12-month requirement for the replacement asset if the period of ownership of the original asset and the replacement asset is at least 12 months.
Last Modified: Friday, 16 November 2007