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CGT - Selecting share parcels I sold

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qak
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I am trying to confirm how I can allocate a share sale. I bought three parcels of 10,000 shares in an ASX listed company on different dates and at different prices. The shares are held via CHESS. I am now going to sell about some of the shares - probably 5,000 out of the 30,000.

 

For CGT purposes I will want to treat this as a sale of part of the last parcel I bought (as this will give me the lowest tax payable). I understand I can do this under specific identification, as i have all the necessary records and will maintain them so I can identify what has been sold and what is left.

 

Is that OK? It isn't going to be treated as tax evasion because I picked the ones that give me the best result?

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Hi @qak,

 

Thanks for getting in touch!

 

Generally speaking Yes, using the ‘specific identification method’ is an acceptable approach.  See identifying shares or units sold. Where, as with Chess, all of your share purchases are able to be identified, you can choose to decide to sell particular shares that you currently hold.  An alternative method is the ‘first in first out’ method.  It is recommended that you keep a record of your choices as the ATO may ask you how you calculated current or future CGT on your share transactions based on the cost bases of those particular shares that you have chosen to either sell or retain.

 

Thanks.

1 REPLY 1

Best answer

ATO Certified

Community Support

Replies 0

Hi @qak,

 

Thanks for getting in touch!

 

Generally speaking Yes, using the ‘specific identification method’ is an acceptable approach.  See identifying shares or units sold. Where, as with Chess, all of your share purchases are able to be identified, you can choose to decide to sell particular shares that you currently hold.  An alternative method is the ‘first in first out’ method.  It is recommended that you keep a record of your choices as the ATO may ask you how you calculated current or future CGT on your share transactions based on the cost bases of those particular shares that you have chosen to either sell or retain.

 

Thanks.

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