Capital gains tax on share sales

how do they work the tax on shares?

Today I made $3055 gain on selling some shares

How much is the CGT on shares ??

Do I have to declare this at tax time ?

 

Same as with property. Profit basically. 50% cgt discount if held more than 12 months

Of course you have to declare it

 

The thing I read is that it could become more complicated if you bought the shares at different price points. You'd hate to have the profit determined based on the first purchase price if that was the lowest purchase price.

 

No, you would have to work out exactly how much profit you made on each parcel of shares bought according to the price paid.

A simple spreadsheet takes care of it.

When you take shares instead of dividends, twice a year you “buy” a small parcel of shares with the dividend income. Takes two minutes to enter the number of shares received and the price paid for each. Spreadsheet calculates running totals so at all times I have the exact cost price to me of shares accumulated by way of dividends over 20+ years. (Then I retired, have no taxable income, so probably no cgt to pay!)
Marg

 

Or if the shares are early stage investment company shares - then they are tax free.

 

Wouldn't your gains be your taxable income in the year you realise them?

 

Yes, but since my present taxable income is zero I can sell down shares to keep any annual gain below the taxable level.
Marg

 

Hi Marg
The spreadsheet sounds like a great idea.

I have just been placing each share's paperwork in its own folder and leaving it at that.

However when my estate eventually has to work it all out it will probably end up being a lot of paperwork. I don't want to leave a difficult estate behind.

Could you share how you set up the spreadsheet with us?

 

Gosh, I’m no expert. From memory I consulted “Excel for dummies” to set up a simple spreadsheet!

First column is number of shares bought.

Second column is price per share (from reinvestment statement)

Third column was purchase price for each parcel (formula, column 1 multiplied by column 2)

Then I kept running totals of column 1 (number of shares) and column 3 (price paid) to give me the number of shares I held (confirmed by share statement) and the total price I had paid.

Then I just print out the page in case of computer crashes (yes, I know! I’m old-fashioned but it works for me).

I’m sure just about anyone could design something cleverer.
Marg

 

Thanks Marg,

I'll order a copy of that book and set up a spreadsheet.

 

I do the exact same as Marg4000 and have a column for brokerage paid, the date they were settled and their asx ticker. Makes it easy to filter later on as the sheet gets bigger. I keep the supporting confirmations in a separate folder by asx ticker.

 

Also if you keep every document in a folder for each FY and sorted by asx ticker, it would be easy for any accountant to reconstruct the portfolio.

 

Can you provide a reference to legislation for this?

 

Sure they could.

If you want to pay someone $100 an hour or so for something you can easily do yourself.
Marg

 

Why do you think this?

 

Of course it can easily be done by yourself, but the point was more like if the estate can not handle the accounting aspect of it it is not the end of the world if the documents have been stored methodically.

 

Sorry, generally wrong.

Maybe, if shares or other investment assets acquired prior to 1987 (?) when cgt rules changed?

@Ouga Maybe you are thinking of PPOR of deceased?
Marg

 

Can we get back to my original question and the easier words please !

So im paying 50 % on every share sale ????

I bought Wesfarmers 1000 shares for $40.50 and sold 41.50 = $1000 profit

So am owing the Tax office $500 ?

This is ridiculous! Cant be right ?

 

Youve never made profits in shares before?