Capital Gains Tax Events & Timing in Australia
Understanding when capital gains tax (CGT) applies requires knowing what constitutes a CGT event and how timing impacts your liability. This guide explains key events, residency rules, and strategies to optimize the 50% CGT discount.
What Triggers a CGT Event?
- Sale of assets (real estate, shares, etc.)
- Gifts of assets to family or charities
- Compensation received for asset damage/loss
- Termination of leases or partnerships
- Death of an asset holder (event occurs at death)
Timing & the 50% CGT Discount
The CGT discount applies if you held the asset for more than 12 months. Timing determines:
- Eligibility for 50% discount (residents only)
- Tax rates (15%/30% for non-residents)
- Cost base adjustments for inflation (pre-1992 assets)
| Scenario | CGT Applies | Discount Available |
|---|---|---|
| Asset sold after 18 months | Yes | Yes (50%) for residents |
| Asset gifted after 6 months | Yes | No (held <12 months) |
| Insurance payout for damaged asset | Yes | Depends on ownership duration |
Resident vs Non-Resident Rules
Australian residents receive the 50% discount for assets held >12 months. Non-residents pay tax at their marginal rate without discounts. Use our CGT calculator to estimate liability based on your circumstances.