I Hate CGT!

Discussion in 'Accounting & Tax' started by skater, 11th Apr, 2019.

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  1. SatayKing

    SatayKing Well-Known Member

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    I am sorry it came as a surprise. I have a question. How can one forget a profit has been made?

    It must be different with property but I know if I've probably made a profit when selling shares even if there are various tranches in a holding (net sale price minus cost base). I know I'm up for CGT this year so did the mental maths and hived off 25% of it to a separate account so I don't spend the taxman's money.

    Real bummer if you're breaking the fingernails scraping the last five cent piece out of your purse to pay the man.
     
    SatayKing, 12th Apr, 2019
    #41
  2. wylie

    wylie Moderator Staff Member

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    You do pay two lots of interest in the FY you sell, but the year following you have NO interest to pay because you prepaid it the year before.

    So the next year you earn the rental income and claim other normal expenses (rates, utilities, repairs etc) against that rent but you have no interest to claim. So it can end in a cycle of having to prepay each year.

    If there is a year when you don't have a lot of income, if you don't work that year, or retire that year, it means your earnings are low and may not be such a problem that you have no interest to claim that year.

    And if you have several loans, you can bring forward the interest on just some loans or on all of them, and the year following, you still have some interest to claim.

    So after the first double hit of interest, you could continue to prepay every year until such time as you have a year where you don't earn much.

    This is not tax advice though. See your accountant before doing this.
     
    wylie, 12th Apr, 2019
    #42
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  3. Lacrim

    Lacrim Well-Known Member

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    Thanks. Yeah, I assumed you'd just prepay each yr till you hit a year you didn't need/want to.

    I'd also assume that once you start prepaying, you can keep selling down year after year and receive the same benefit of upfronted losses/expenses.
     
    Lacrim, 12th Apr, 2019
    #43
  4. skater

    skater Well-Known Member

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    I didn't forget a profit had been made. The issue is that the property sold early in 2017-18 financial year and the accountant is just finalising it now. I had assumed that all payments had already been made.

    I haven't spent the taxman's money, it's sitting safely in one of my offsets.

    Plenty of money to pay for it, it's just I'd rather not, if you know what I mean.:p
     
    skater, 12th Apr, 2019
    #44
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  5. DoggaPP

    DoggaPP Well-Known Member

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    Wife inherited a small parcel of AMP and IAG shares which she elected to just have transferred to her NABTrade account. All fine, except we cannot find the original purchase paperwork of the benefactor (wife's mother) and have zero way of knowing what the base price or purchase date is to calculate capital gains. Is this something ASX would/could help with? We do have late mother's HIN number, however as the estate is now settled the trading account is closed too.
     
    DoggaPP, 13th Apr, 2019
    #45
  6. Angel

    Angel Well-Known Member

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    Depends where they are located. If Sydney, the capital gain will be lower in two years time than it is now :)
     
    Angel, 13th Apr, 2019
    #46
  7. marty998

    marty998 Well-Known Member

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    Quite likely they were acquired in the demutualistions....

    Here is the information for IAG - tax cost base appears to be $1.78
    FAQ | IAG Limited

    Here is the information for AMP:
    Tax information

    It's a little more complicated because of the Henderson Demerger.

    You may find if you sell both IAG and AMP whatever gains you have on IAG are neatly offset by losses on AMP...
     
    marty998, 13th Apr, 2019
    #47
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  8. MWI

    MWI Well-Known Member

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    Yeah for some there is CGT and then for some their is land tax....:(
     
    MWI, 13th Apr, 2019
    #48
  9. Scott No Mates

    Scott No Mates Well-Known Member

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    If you're really lucky you get both.
     
    Scott No Mates, 13th Apr, 2019
    #49
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  10. skater

    skater Well-Known Member

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    Tell me about it. :eek:
     
    skater, 13th Apr, 2019
    #50
    datto likes this.
  11. DoggaPP

    DoggaPP Well-Known Member

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    Aha! The penny has now dropped. Thank you.

    I have some letters of Mother's re Henderson so that is probably the answer. That gives me an excellent shove in the right direction.

    Much appreciated.
     
    DoggaPP, 14th Apr, 2019
    #51
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