Firstly, I know....."never sell!" My question though is this...... Assume I will be buying $5000 worth of shares every month for the next 7-10 years. I will of course keep records of the buy price and number of shares bought each time. Then assume I want to sell down some shares in order to fund the purchase of a house for example. How is the CGT calculated? I assume the following.... Each share parcel bought is 1000 shares Assume I sell 20,000 shares. The capital gains will be 20 individual amounts calculated as the sell price minus buy price of each individual parcel. (I assume I can apply the CGT to the most recently purchased share parcels) If any parcels have been held for longer than 12 months the 50% discount is applied to those parcels. CGT is then paid on the 20 amounts added together and is paid at my MTR. Is that about right or am I totally off?
yes, that is it basically. Tax Tip 148: CGT and Different Parcels of the Same Shares Tax Tip 148: CGT and Different Parcels of the Same Shares
My understanding is that you can nominate which shares (i.e. the buy price) you are selling. So yes, you can selectively sell to suit your circumstances and tax position, but if you are looking to sell down your entire portfolio, then you will have to sell those shares you bought first at some stage. I am still new at this too so happy to be corrected
Hi Tony, the ATo looks at first in, first out when you calculate profit/loss. I received an audit when I did my returns myself for the first time last year. Fortunately for me, the reason I did it is because the year was so bad I only returned $8000 gain so I had to do an amendment, happily, because I knew that the following FY, I have a big cap gain. I took care to tell them that I would use the FIFo method thereafter so now i'm happily creating tax 'losses' to offset my cap gain. it's a bizarre thing to do but I make more money from tax savings than from selling the shares. it won't last of course. please talk to more knowledgeable people than me before you believe that I know what I'm talking about. Good luck, KY
may I please ask do i have to pay tax on yearly net capital gain in managed fund even if I don't redeem any units? thx
If that is a realised capital gain which is paid out with your distribution the answer is yes. Even if you reinvest the distribution the answer is yes. This tax outcome is common with managed funds. But if your units have simply increased in value then no.
thanks for the info.. I looked into the ATO website and found this: Capital gains if my Total capital gain (18H) and net capital gain (18A) is under $10,000 I suppose no need to fill this in mytax rite? or am I missing something?
VERY incorrect. All CGT profits must be reported and tax paid. If the total gains exceed $10K an additional schedule is also required. Its not like its tax exempt up to $10K each year.
Thanks Paul, does it mean I interpret the info incorrectly or the website provides inaccurate info? I am not redeeming any units I have on the managed fund. I have lodged my tax based on this info though .... will something bite me back in the future?
it is referring to the Capital Gains and Loss Schedule not to the capital gain. Website is accurate. Interpretation incorrect.
