Capital gains tax shares brokerage
If you received more from the CGT event than the asset cost you that is, the capital proceeds are greater than the cost base , the difference is your capital gain. The three ways of calculating your capital gain are described in step 3 of part A. Generally, for shares, the cost base and reduced cost base are the same.
However, they will be different if you choose the indexation method, because the reduced cost base cannot be indexed. If the capital proceeds are less than the cost base but more than the reduced cost base, you have not made a capital gain or a capital loss.
You may find it easier to follow the worked examples in chapter B2. The capital proceeds are what you receive, or are taken to receive, when you sell or otherwise dispose of your shares or units.
For more information, see part A or the worked examples in chapter B2. You may also need to reduce the cost base for an asset such as a share or unit by the amount of any non-assessable payment you received from the company or fund during the time you owned the share or unit. This is explained in part B3 shares and part C2 units. For more information on how to determine your cost base and reduced cost base, see the Guide to capital gains tax If you did not make a capital gain, you need to calculate a reduced cost base of your asset before you can work out any capital loss.
For units, you may need to make adjustments to the cost base and reduced cost base depending on the types of amounts distributed. Your fund should advise you of these amounts in its statements:. If the capital proceeds are less than the reduced cost base, the difference is your capital loss. If you did not make a capital gain, you need to calculate a reduced cost base of your asset before you can work out any capital loss. For units, you may need to make adjustments to the cost base and reduced cost base depending on the types of amounts distributed.
Your fund should advise you of these amounts in its statements:. If the capital proceeds are less than the reduced cost base, the difference is your capital loss. If the capital proceeds are less than or equal to the cost base but more than or equal to the reduced cost base, you have not made a capital gain or a capital loss. Write the total of the capital gains for all your assets for the current year at H item 18 on your tax return supplementary section.
If you had a distribution of capital gains from a managed fund, include this in your total capital gains. See step 3 in chapter C1. If you have any capital losses, do not deduct them from the capital gains before writing the total amount at H. Fred does not have any other capital gains. If you do not have any capital losses from assets you disposed of this year or unapplied net capital losses from earlier years, go to step 9.
If you made any capital losses this year, deduct them from the amount you wrote at H. If you have unapplied net capital losses from earlier years, deduct them from the amount remaining after you deduct the capital losses made this year.
Deduct both types of losses in the manner that gives you the greatest benefit. You will probably get the greatest benefit if you deduct capital losses from capital gains in the following order:. Although this treatment may seem fairly harsh - there is an up side for some. Because shares held by traders are classified as stock - any unrealised losses can be claimed as tax deductions. So to minimise tax on share transactions, you can try the following: The tax world is a jungle - but if you know what you are in for when you start down the investment road and use the best structure for your own circumstances, then you can much better plan for a tax effective exit.
This article is general in nature and is not intended as investment advice. Readers should always seek further advice before making any financial decisions. TheBull's free daily and weekly newsletters. Click here to receive TheBull's free weekly newsletters on stocks, trading, investing and more. Are share buybacks a positive or negative sign? How smartphones are heating up the planet. The impact of technology on the investment landscape The investment landscape has changed over the last few decades as technology has worked its way into all aspects of the field.
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