To use the Capital Gains Tax calculators, download the starter file from the Smart Suite website or open from HowNow Knowledge.
Make sure the date on the Home sheet is the correct year that you wish to calculate the loan for. Also select Individual Non Resident as the Entity Type to ensure the right components of the Index are available.
Begin by inserting a 'CGT2 Event and Cost Base' worksheet for each capital gains event in the Capital Gains Events section of the Index. It is recommended that you change the title to the event's name so it can be easily recognised.
In the worksheet, complete the 'CGT event details' section. The CGT event description is automatically selected from the name of the event on the Index. Dropdown menus are available for the 'CGT as set type' and 'Which CGT event?' fields. Where a capital gain is partially exempt (e.g. the client is eligible for the partial main residence exemption), enter the percentage that is subject to capital gains tax where indicated.
Complete all the elements of the cost base or reduced cost base in the 'First element to Fifth' element sections of the worksheet as required. Each section has a notes area that can be expanded to explain what each element covers.
CGT discount for foreign/temporary resident individuals section
Discount testing period
Enter the discount testing period start date and end date in the 'CGT discount for foreign/temporary resident individuals' section, noting the different scenarios below:
OWNER OF THE ASSET | DISCOUNT TESTING PERIOD |
Individual | The discount starting period starts on the day the individual acquired the asset and ends on the day of the CGT event. |
Individual interest held in a fixed trust | The discount testing period starts on the most recent day the individual became a beneficiary of the trust and ends on the day the individual made the gain (generally the last day of the trust's tax year). |
The individual is a beneficiary of a non-fixed trust and the relevant trust gain:
| The discount testing period starts on the day of that acquisition and ends on the day the individual made the gain (generally the last day of the trust's tax year). |
The individual is a beneficiary of a non-fixed trust and the relevant trust gain is referable (either directly or indirectly through one or more interposed trusts that are not fixed trusts) to a capital gain made by a fixed trust. | The discount testing period started on the most recent day that the trust whose capital gain is directly referable to the capital gain made by the fixed trust became a beneficiary of the fixed trust and ends on the day the individual made the gain (generally the last day of the year, for the trust of which the individual is a beneficiary). |
Residency status
Answer the residency status questions. If either of the answers to these questions were 'No', enter the dates that the individual was NOT an Australian resident during the CGT event period.
Discount Method
If the CGT asset was acquired before 8 May 2012 and the individual was a foreign/temporary resident on 8 May 2012, the discount percentage is calculated using the "apportioning method" unless the taxpayer chooses to use the "market value" method.
If you want to use the market value method, enter both the market value and the cost base of the CGT asset at 8 May 2012.
To calculate the cost base at 8 May 2012, you must assume a CGT event happened to the asset on that day (ITAA 1997 s 110-25(12)). This means you must account for all cost base modification as at 8 May 2012. For deductible expenditure, such as capital works deductions (special building write-off) on income producing buildings, you may need to exclude from the cost base the deduction claimed up to 8 May 2012. This will depend on the dates that the asset was originally acquired and the expenditure incurred.
The worksheet will compare the result under the market value method with the default calculation under the apportionment method and select the method that gives the greater discount. The CGT discount percentage will be transferred to the Index sheet.
Repeat the above steps on a separate worksheet for each CGT event. Once a worksheet has been completed for all CGT events, the Index can be completed.
Summary
For each CGT event, consider which method will provide the best result and select the chosen method in the 'Select method' column. Once the method has been selected, click the Refresh Summary button to show the capital gain/loss amount for each CGT event. This will also pull through any discount percentages from the individual worksheets.
Any prior years' capital losses are entered (as a negative) in the top row of the 'Capital Gains Events' section and will need to be applied against the corresponding gains in the 'Capital loss applied' column.
A summary of the capital gains/losses and a reconciliation of losses is displayed in the 'Total capital gains & reconciliation of losses' section of the Index.
Templates available in the Capital Gains Tax starter
REFERENCE | NAME | SECTION |
CGT1 | CGT Checklist | Job Management |
A01 | Matters for Partner | Job Management |
A02 | Items Forward | Job Management |
A05 | Review Points | Job Management |
A06 | Client Queries | Job Management |
A10 | Matters for Client | Job Management |
A13 | Workpaper Items | Job Management |
CGT2 | CGT Event and Cost Base | Capital Gains Events |
C28 | SBE Aggregated Turnover | Capital Gains Events |
J30 | GST Margin Scheme | Capital Gains Events |
Z01 | Spare Worksheet - Blank | ALL |
Z02 | Spare Worksheet - List | ALL |
To add other templates into your firm starter file, please see the Smart Workpaper Customisation support articles.