CGT/Tax on purchases of same shares

[inyaface]

anyone have experience on how to calculate CGT on shares in the same company that have been bought over years or months and sell in parts.

or where in ATO website I can find more information regarding this.

For example buying TLS over 3 years (numbers are factious):
1. buy july 2010 1,000 shares
2. buy dec 2010 12,000 shares
3. buy feb 2011 5,000 shares
4. buy dec 2011 7,000 shares
5. Sell jan 2012 5,000 shares
6. buy feb 2012 15,000 shares
7. Sell mar 2012 20,000 shares
8. buy dec 2012 10,000 shares
9. Sell Feb 2013 20,000 shares

 

[So_Cynical]

Each share in each parcel of shares needs to be allocated to a share sold and or held, and CGT paid accordingly.

You get a 50% discount on shares held for more than 12 months.... software comes in handy for selling from mixed parcels.

 

[Julia]

You can choose what parcel to quote when selling. Obviously you're going to want to minimise your capital gain so take the parcel (bearing in mind the 12 months factor) that gives you the smallest amount of profit.
Do not believe anyone who tells you that you're obliged to sell eg the first parcel you bought first.

 

[ROE]

You can choose what parcel to quote when selling. Obviously you're going to want to minimise your capital gain so take the parcel (bearing in mind the 12 months factor) that gives you the smallest amount of profit.
Do not believe anyone who tells you that you're obliged to sell eg the first parcel you bought first.

what ever method u chose it has to be consistence, ie you can chose selling second parcel of shares
instead of first but then you have to stick to selling second parcels of shares...you cant switch/swap

 

[ROE]

anyone have experience on how to calculate CGT on shares in the same company that have been bought over years or months and sell in parts.

or where in ATO website I can find more information regarding this.

For example buying TLS over 3 years (numbers are factious):
1. buy july 2010 1,000 shares
2. buy dec 2010 12,000 shares
3. buy feb 2011 5,000 shares
4. buy dec 2011 7,000 shares
5. Sell jan 2012 5,000 shares
6. buy feb 2012 15,000 shares
7. Sell mar 2012 20,000 shares
8. buy dec 2012 10,000 shares
9. Sell Feb 2013 20,000 shares

Get this piece of software and do all your data entry it will sort it out for you
you can try before you buy...good piece of software, save you hours at tax time.

at tax time...hit print tax report...hand it to your accountant ..or punch in the number they give u in etax..
All done

http://www.topshare.com.au/

 

[blue0810]

..
or where in ATO website I can find more information regarding this.
...

http://www.ato.gov.au/content/downloads/ind00313608n41520612.pdf

 

[inyaface]

All excellent information! Thanks a lot, learning something new about trading everyday.

 

[Julia]

what ever method u chose it has to be consistence, ie you can chose selling second parcel of shares
instead of first but then you have to stick to selling second parcels of shares...you cant switch/swap

I've never heard of that before and have always sold whatever most advantaged me at the time. Never been pulled up on it by my very picky accountant or the auditor. Can you link to any legislation that so dictates?

 

[So_Cynical]

what ever method u chose it has to be consistence, ie you can chose selling second parcel of shares
instead of first but then you have to stick to selling second parcels of shares...you cant switch/swap

No I don't think so... that's not how i do it anyway, as far as i understand you don't have to be consistent, just have to keep a record of what you have done so it will all make sense to an auditor....and that's where a good software program comes into it.

 

[ROE]

No I don't think so... that's not how i do it anyway, as far as i understand you don't have to be consistent, just have to keep a record of what you have done so it will all make sense to an auditor....and that's where a good software program comes into it.

I think you are right, my bad

http://www.ato.gov.au/individuals/content.aspx?menuid=0&doc=/content/00313607.htm&page=41&H41

 

[tinhat]

Just one thing to keep in mind. If you are selling a share that you are claiming a franking credit for, then you have to apply the 45 day holding rule (if it applies to you) and on this basis the tax office applies the Last In First Out (LIFO) rule. My understanding of this can be shown in this example:

Holding No1 500 shares in stock 'XYZ' bought 01/01/2009
Holding No2 500 shares in stock 'XYZ' bought 01/02/2013

XYZ dividend deeming date 01/03/2013.

Let's say you want to sell 500 shares in 'XYZ' tomorrow (05/03/2013). If you sell these shares the LIFO rule applies and the parcel sold will be identified as Holding No 2. You have only held these shares for 32 days and you cannot claim franking credits for the dividend on those 500 shares.

Is this other people's understanding of the 45 day holding rule and the LIFO rule?

 

[Julia]

Is this other people's understanding of the 45 day holding rule and the LIFO rule?

Yes. And it makes obvious sense.

 

[saundy69]

http://www.ato.gov.au/individuals/content.aspx?menuid=0&doc=/content/00313607.htm&page=41&H41

 

[PinkGirl]

Just one thing to keep in mind. If you are selling a share that you are claiming a franking credit for, then you have to apply the 45 day holding rule (if it applies to you) and on this basis the tax office applies the Last In First Out (LIFO) rule. My understanding of this can be shown in this example:

Holding No1 500 shares in stock 'XYZ' bought 01/01/2009
Holding No2 500 shares in stock 'XYZ' bought 01/02/2013

XYZ dividend deeming date 01/03/2013.

Let's say you want to sell 500 shares in 'XYZ' tomorrow (05/03/2013). If you sell these shares the LIFO rule applies and the parcel sold will be identified as Holding No 2. You have only held these shares for 32 days and you cannot claim franking credits for the dividend on those 500 shares.

Is this other people's understanding of the 45 day holding rule and the LIFO rule?

You would have held them for 30 days as you can't count the acquisition and sale date

 

[13ugs13unny]

Is this other people's understanding of the 45 day holding rule and the LIFO rule?

There is different rules for investors and traders, SMSF in regards to share values CGT franking credit etc and how your treated. after june 30.

If people want to clarify on here would be great.