Announcements
COVID-19 update: Check out our answers to common questions about JobKeeper payment and early release of super.

ATO Community

Re: CGT effective date for share trades

Highlighted

Newbie

Views 657

Replies 4

I understand that the CGT-event date for a share trade is "the trade date, not the settlement date", but trade date can be several things. Often you will enter a "limit order" (to buy lower than the market or sell higher) and it will go into the "market depth" order queue and might gradually transact in several parcels over several days, and a contract note is only created when the order is either completed or canceled. So "trade date" can be:

 

  1. the date you enter the order
  2. the date(s) the order transacts on the stock exchange
  3. the date the contract note is generated.

 

I've been using (3) for all my accounting so far, but before lodging any more returns, I would like some clarity on which date is most correct!

 

I've already looked in:

1 ACCEPTED SOLUTION

Accepted Solutions
Highlighted

Best answer

Taxicorn

Replies 1

It would have to be (2) if there were multiple buys/sells over a period of time then it would relate to when those parcels of shares were actually bought/sold.

 

4 REPLIES 4
Highlighted

Best answer

Taxicorn

Replies 1

It would have to be (2) if there were multiple buys/sells over a period of time then it would relate to when those parcels of shares were actually bought/sold.

 

Highlighted

Newbie

Replies 0

Not the answer I was hoping for, but thanks for your opinion @macfanboy . Do you have a reference that would back it up? I'm looking at having to re-do some past tax returns, which won't be fun. It might also be difficult to get data. One online stock broker definitely offers the download of your "order history" as opposed to contract note history, but I'm not sure about other brokers.

 

I might consider applying for a tax ruling to be sure.

Highlighted

I'm new

Replies 0

I use the same rule as investment property - i.e. the date is contract date (aka trade date) rather than settlement date.

 

This is in line with your reference to https://www.ato.gov.au/General/Capital-gains-tax/Selling-an-asset-and-other-CGT-events/Time-of-the-C...

Highlighted

ATO Certified

Community Support

Replies 0

Hi @Newey

 

Great to see a first post so I wanted to make sure we welcomed you.

 

 See Shares, units and similar investments for any additional information also. As you will see there Shares in a company or units in a unit trust (including a managed fund) are treated in the same way as any other asset for capital gains (CGT) tax purposes.

 

Thanks again for your input Newey.

Kind regards

MarkA