What assets are excluded?
assets acquired before 20 September 1985
exempt assets: cars, motor cycles
exempt asset:bravery awards
exempt assets: collectibles (worth less than $500)
exempt assets: personal use assets (which cost less than $10,000)
exempt assets: assets used to produce exempt income
exempt capital receipts
exempt transactions: Expiry of a lease
exempt transactions: Transfer of stratum units
exempt transactions: Sale of rights to mine
exempt transactions: Issue or allotment of shares or units
exempt transactions: Foreign currency hedging gains and losses
exempt transactions: Gifts under Cultural Bequests Program
anti-overlap provisions: Reducing capital gains if amount otherwise assessable
anti-overlap provisions: Eligible termination payments
anti-overlap provisions: Trading stock
anti-overlap provisions: Film copyright
anti-overlap provisions: Research and development
if you acquired the asset before 20 September 1985 any capital gain is disregarded
Section
104-10(5) says so…
Exceptions
(5) A *capital gain or *capital loss you make is disregarded if:
(a) you *acquired the asset before 20 September 1985; or
(b) for a lease:
(i) it was granted before that day; or
(ii) if it has been renewed or extended—the start of the last renewal or extension occurred before that day; or
(c) the *disposal of the asset was done to provide or redeem a security.
Note: You can make a gain if you dispose of shares in a company, or an interest in a trust, that you acquired before that day: see CGT event K6.
Does an exemption apply?
If no capital gains tax event took place, there will be no capital gain
.
But even if an event took place,
no amount need be included if the property was exempt from capital gains tax.
The place to look for exemptions is
section 118.
Subdivision 118-A lists exempt assets for which a capital gain or loss will be disregarded. These are:
Section 118-5 (a) car, motor cycle or similar vehicle
Section 118-5 (b) decoration awarded for valour or brave conduct, 
Sunless you paid money or gave property for it.
Section 118-10 (1) disregards the gain or loss on collectibles, which are defined at Section 108(10) (2)
A collectable is:
(a) *artwork, jewellery, an antique, or a coin or medallion; or
(b) a rare folio, manuscript or book; or
(c) a postage stamp or first day cover; or
that is used or kept mainly for your (or your *associate’s) personal use or enjoyment.
(3) These are also collectables:
(a) an interest in any of the things covered by subsection (2); or
(b) a debt that arises from any of those things; or
(c) an option or right to *acquire any of those things.
Note: Collectables acquired for $500 or less are exempt. However, you get an exemption for an interest in one only if the market value of all the interests combined is $500 or less: see Subdivision 118-A.
Did you read the fine print? Section
118-10 (2) disregards the capital gain or loss you make on your interest in a collectable, only if that collectible is worth less than $500
Section
118-10 (3) disregards the gain or loss on a personal use asset, which is defined in section 108-(20) (2) A personal use asset is:
(a) a *CGT asset (except a *collectable) that is used or kept mainly for your (or your *associate’s) personal use or enjoyment; or
(b) an option or right to *acquire a *CGT asset of that kind; or
(c) a debt arising from a *CGT event in which the *CGT asset the subject of the event was one covered by paragraph (a); or
(d) a debt arising other than:
(i) in the course of gaining or producing your assessable income; or
(ii) from your carrying on a *business.
Note 1: There is an exemption for a personal use asset you acquire for $10,000 or less: see Subdivision 118-A.
Note 2: A debt arising from a CGT event involving a CGT asset kept mainly for your personal use and enjoyment is a personal use asset to prevent any loss arising from the debt being a normal capital loss.
Check the fine print?
Personal use assets acquired for $10,000 or less are exempt from capital gains tax
.
So collectibles worth less than $500
Section 108(10) and personal use assets acquired for $10,000 Section 108(2) are exempted.
Assets used to produce exempt income
Section
118-120 (1) disregards a capital gain or capital loss you make from an asset that you used solely to produce your exempt income unless it comes within the definitions in section 36-20 of
Exempt income subject to withholding tax which is exempt because withholding tax is payable on it, or would be payable but for certain exemptions. This would include money loaned to overseas borrowers which is exempt from income tax because it has been subjected to interest withholding tax, and
excluded exempt income - which is
Foreign branch profits of Australian companies
Attributed income of controlled foreign companies
Certain non-portfolio dividends from foreign companies
Amounts paid out of attributed foreign investment fund income
Income derived by way of the provision of employment fringe benefits
Certain attributable income of non-resident trust estates).
Capital gains/losses on exempt receipts are disregarded
So what are exempt capital receipts?
Section 118-15 lists certain receipts, which will be disregarded
Gains or losses from the following exempt transactions are disregarded
118-40 Expiry of a lease For example, if the 99 year lease over land on which your your house stands expires, any gain will be disregarded
118-42 Transfer of stratum units For example, if you renovate an old house and turn it into flats, then register each of the flats as separate titles, any gain will be disregarded
118-45 Sale of rights to mine if you have exempt income for the income year (because of section 330-60) from the sale, transfer or assignment.
118-50 Issue or allotment of shares or units For example, if you receive shares as part of the float of some company any gain will be disregarded
118-55 Foreign currency hedging gains and losses. For example, if you are an importer of goods and enter into a contract to purchase foreign currency to pay for the imports at the current exchange rate solely to reduce the risk of financial loss you may suffer from currency exchange rate fluctuations
118-60 Gifts under Cultural Bequests Program For example, you leave your fortune in your will to the local art gallery
Anti-overlap provisions (that reduce your capital gain by the amount that is otherwise assessable) are disregarded...
The Assessment Act does its utmost to ensure that receipts are not included in assessable income under more than one specific provision. The following sections ensure that the capital gains tax provisions can not include amounts already included by existing provisions again
118-20 Reducing capital gains if amounts otherwise assessable
118-22 Eligible termination payments
118-25 Trading stock
118-30 Film copyright
118-35 Research and development
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