I have a capital gains tax question. I thought i'll post here before I researched and spoke to my accountant. I only recently started trading so have not had to pay any tax yet. I understand there is a 50% CGT discount if you hold the shares for more than a year. Now the question-
Say I bought 10,000 shares of X on 1 July 2007 at 10c. During the year I accumulated and traded more of X but never let my holdings drop below 10,000 shares. When i finally sell all my holding of X on 1 August 2008 at a value of $1.50 will I get the 50% CGT discount on the $1.40 profit made on the original purchase back on 1 July 2007? During the year I would have accumulated and sold at prices between 10c and $1.50.
The question I'm getting at is when you have holdings you purchased at various prices, how do you determine which holding you have sold. Is the first purchased the first sold?