Question 3: does an exception or exemption apply? Where it is determined that there is a CGT event, it is necessary to establish whether there is an exception or exemption that would reduce the capital gain or loss or allow the taxpayer to disregard it. Div 104 – exception/exemption/special rules relating to collectables and personal use assets Div 118 – exemptions for capital gains and capital losses on these assets, as well as many other exemptions The most common exception in Div 104 applies to CGT events where the CGT asset was acquired before 20 September 1985. Where this was the case, the capital gain or loss is generally disregarded. Exceptions can we divided into four broad categories:  Exempt gains and losses on certain assets;  Exempt or loss denying transactions  Anti-overlap provisions  Small business relief