Who can claim
This deduction is available to individuals and companies.
- You made one or more capital gains or capital losses in the income year.
- You can identify the taxpayer type, ownership period and any foreign-residency period.
What you cannot claim
- Companies cannot use the general 50% CGT discount.
- Individuals and trusts generally need at least 12 months of ownership for the current 50% discount.
- Capital losses are applied before the CGT discount and cannot be deducted from ordinary income.
- Collectable losses can be used only against collectable gains.
How the amount is worked out
Apply current-year capital losses, then unapplied prior-year net capital losses, to capital gains before applying an available discount. Individuals and trusts can generally reduce an eligible discount capital gain by 50%; an affordable-housing interest may qualify for an additional discount, while foreign-residency periods can reduce the discount.
Records the ATO expects
- CGT worksheet
- Capital-loss register
- Acquisition and disposal dates
- Residency history
Before you rely on this rule
Loss allocation can change the final result. Apply losses to gains deliberately before using a discount.
Where this rule comes from
Primary source: Income Tax Assessment Act 1997 Parts 3-1 and 3-3 (Compilation 266 in force 1 July 2026). Reviewed 30 July 2026. Covers the 2025-26 and 2026-27 income years.
Supporting sources:
- ATO Guide to capital gains tax 2026 (Guide to capital gains tax 2026)