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Re: Cost Base of Shares

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Newbie

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I disputed my mums Will and as per Court Order I received AXA shares.

 

My mother bought these shares on 22/07/1996.

Mums Date of Death: 15/05/2016

Date shares received: 29/05/2018.

Date shares sold: 19/06/2018.

 

What is the cost base date of the shares?

 

 

 

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ATO Certified

Taxicorn

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@ASA007 

 

The cost base of the shares is the cost base that the mother had when she died. This follows from the rule that when you inherit property the cost base of the inherited property when you sell it is taken from the cost base of the deceased at the date of death :

 

if the deceased acquired the asset on or after 20 September 1985, the first element of your cost base and reduced cost base is taken to be the deceased’s cost base and reduced cost base for the asset on the day they died.”

 

See deceased-estates-and-capital-gains-tax.

Importantly, it is the ‘cost base’ of the deceased, and not the market value of the asset on the day the person died.

 

Ordinarily, this is the amount paid by the deceased for the shares. (22/7/1996).

 

Note, because it was before  21 September 1999 you can use the index method if it works out better.

 

Did she purchase them or were they given to her due to the AXA/AMP merger?

Did she participate in the dividend reinvestment?

 

I have calculated a lot of AXA share sales lately, with shares obtained back in 1996/197 and all of them end up as a loss.

 

3 REPLIES 3
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Best answer

ATO Certified

Taxicorn

Replies 1

@ASA007 

 

The cost base of the shares is the cost base that the mother had when she died. This follows from the rule that when you inherit property the cost base of the inherited property when you sell it is taken from the cost base of the deceased at the date of death :

 

if the deceased acquired the asset on or after 20 September 1985, the first element of your cost base and reduced cost base is taken to be the deceased’s cost base and reduced cost base for the asset on the day they died.”

 

See deceased-estates-and-capital-gains-tax.

Importantly, it is the ‘cost base’ of the deceased, and not the market value of the asset on the day the person died.

 

Ordinarily, this is the amount paid by the deceased for the shares. (22/7/1996).

 

Note, because it was before  21 September 1999 you can use the index method if it works out better.

 

Did she purchase them or were they given to her due to the AXA/AMP merger?

Did she participate in the dividend reinvestment?

 

I have calculated a lot of AXA share sales lately, with shares obtained back in 1996/197 and all of them end up as a loss.

 

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Newbie

Replies 0

Thanks for the reply

Next question is if cost base is "Ordinarily, this is the amount paid by the deceased for the shares. (22/7/1996)"

Can I use 50% discount method? Though I held on to the asset for 1 month only, the cost base date and the date I sold is more than 12 months. 

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ATO Certified

Community Support

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Hi @ASA007

 

A warm welcome to our Community and your first posts.

 

I found this on our website per your discount method question. -  Simply put it is on the date the deceased acquired the asset, if they acquired it on or after 20 September 1985.  For more detail see Choosing a calculation method

 

Thanks for your queries.

Kind Regards

MarkA