Knowing the time a CGT asset is acquired is important because:

• CGT generally doesn’t apply to assets acquired before 20 September 1985 (these are known as pre-CGT assets)
• the rules for working out a capital gain or loss have changed over time
• to qualify for the CGT discount, you need have owned the asset for at least 12 months
• it affects whether and how the small business concessions may apply to reduce your capital gain.

For example, if you enter into a contract to purchase a CGT asset such as land, the time of acquisition is when you enter into the contract. If you obtain an asset without entering into a contract, the time of acquisition is when you start being the asset’s owner.

However, you can also acquire a CGT asset when another party doesn’t sell you an existing asset, such as when a company issues or allots shares to you. In this case, you acquire the shares when you enter into a contract to buy them or, if there is no contract, at the time of their issue or allotment.

There are other rules that determine when you have acquired an asset for CGT purposes. For example, if a CGT asset passes to you as a beneficiary of someone who died, you’re taken to have acquired the asset on the date of the person’s death. Another example is if you acquire a CGT asset through a rollover, such as the small business restructure roll-over.

Remember to keep records of the acquisition date of a CGT asset to ensure you don’t pay more tax than you need to when you sell or dispose of it.

You may keep a CGT asset for a long time, so it’s important to get these records in place as soon as you acquire it.