ASSETS ACQUIRED BEFORE 1 OCTOBER 2001

A person must exclude the portion of a capital gain or loss relating to the period before 1 October 2001. The value of the asset as at 1 October 2001 (referred to as the “valuation date value”) must be determined.
 
The general formula
 
The base cost of a pre-valuation date asset is the sum of its valuation date value and any allowable expenditure incurred on or after the valuation date in respect of that asset. Expressed as a formula the base cost of a pre-1 October 2001 asset is:
 
Base cost = valuation date value (VDV) + post-1 October 2001 expenditure
 
This does not apply to a person who has adopted the weighted-average method for valuing certain categories of identical assets. The reason for this is that pre-valuation date assets cannot be separately identified once they have been merged in a pool with post-valuation date assets.
 
The valuation date value of an asset could be one of the following:
 
  • Market value on 1 October 2001
  • Time-apportionment base cost (TAB)
  • 20% x (Proceeds – post-valuation date expenditure)
  • Proceeds – post-valuation date expenditure
Last Updated: 04/08/2014 3:57 PM     print this page
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What if an asset was acquired before the valuation date?
For an asset acquired before the valuation date and disposed of thereafter, CGT will only be payable on the capital gain attributable to the period after the valuation date.