CGT on shares

Hi all,
just wanted to check what the CGT would be on shares.

Borrowed and Bought for 10000. Over 3 years paid 2000 interest on loan. Deducted interest along the way. Got 1000 worth of divis and franking credits - declared as income. Sold for 12000. Is my CG 2000, halved to give 1000?

Borrowed and Bought for 10000. Over 30 years, paid 8000 interest on loan. Deducted interest along the way. Got 9000 worth of divis and franking credits - declared as income. Sold for 80000. Is my CG 70000, halved to give 35000? Or should I be doing a CPI calculation to increase the cost. Say CPI was 4% per year over the 30 years.What if CPI was 1%.

Thanks!

 

Over 30 years ? Maybe these are pre cgt assets

 

Some exact dates would help, because what method you use (or whether there is CGT at all) depends on when you purchased the shares.

Any dividend reinvestment plans?

 

Interest you paid won't be taken into account unless you did not claim it at the time.

 

I should have said these are hypothetical calculations for the future (I am working out what records I need to keep!). I don't use DRP's to try and keep it simple. Good to hear that I won't need to use interest rates if I have claimed along the way.

 

If these are shares you will buy in the future, indexation is not a valid way to calc cg.

 

I started buying shares 12 years ago. Some have substantial percentage gains - and I am trying to clean up my records and notes now so I don't find when I come to sell them in 15 years that I am missing something and not over or under declaring.

 

If bought in 2007, the indexation method cannot be used. Though the method doesnt affect what records you need to keep.

 

Search function is useful.

Have a quiet read of this link and there may be some information in it which you could find helpful.

Record Keeping (CGT / Estate) - Shares / LICs / ETFs ...

 

If any of the "shares" are managed funds or ETFs and you receive a annual tax statement then allow for tax deferred amounts of income from each year. Tax deferred amounts eman that each year the cost base reduces. So for each $1 of tax deferred income your pre-discount gain will increase by $1

Also consider any losses will firstly reduce gains before any discount is available. Many think of it differently.

eg Correct v Incorrect
Correct $400 gain $200 Loss. = $400- $200 = $200 / 2 = $100 taxable
Incorrect $400 / 2 = $200 - $200 = $0

s102-1 ITAA97

 

Thanks this was useful. I cannot seem to find all my 12 year old contracts, but I do have my broker bank statements with buy amounts alongside share names. These match my spreadsheets, so presume this will be fine.

 

Thanks! Always wonder about the incorrect loss formula above - but never used it as it does seem a little cheeky.

Mostly ETFs, so will scrounge around in my registry for the annaual statements and save them in dropbox.

 

Thanks.

Surprised to hear you can't use indexation to increase the cost base. If indexation gave a great discount than the 50% CGT it would seem that it was a reasonable thing to do.

 

The indexation method of calculating your capital gain

 

You can use indexation. If eligible. Thats the catch.

However it is no longer effective v's the 50% discount basis for most assets so nobody does. It does remain available for assets acquired prior to 11:45am on 21 September 1999. Where a prior to current year CGT loss is being fully offset v's a eligible indexed gain it may still be marginally beneficial for a complying asset as it reduces the taxable gain prior to apply a loss and avoids loss wasting by a small sum. Its rare for pre-1999 assets I will admit.

Professional tax software caters for this and it remains something we monitor.

The indexation method of calculating your capital gain