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Re: CGT for shares

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Initiate

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Replies 7

Hi everyone,

I'm a bit confused when it comes to shares, so let's say a friend of mine bought 10,000 shares in BHP Billion in October 1985, paying $16.50 per share. She decided to sell her entire holding, for $20 per share, and signed a share transfer document and handed the transfer and share script to the Stock Exchange on 21 June 2019. The transfer was not registered with BHP Billion until 10 July 2019.

So basically, the CGT event incurred on 10 July 2019 which will include on 2020 FY? Is there any easier method to calculate the CGT for shares?


Thanks!
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Taxicorn

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@Mina08 

 

Sorry, misread the question, yes the 2019 financial year. 

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Taxicorn

Replies 2

@Mina08 

 

As they entered into a contract to sell the shares before the end of 2020 Financial year it should be included in the 2020 tax return.

 

https://www.ato.gov.au/General/Capital-gains-tax/Selling-an-asset-and-other-CGT-events/Time-of-the-C...

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Initiate

Replies 1

If it happened before the 2020 FY. The amount/transaction all should be included in 2019, right?


Thanks!
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Most helpful response

Taxicorn

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@Mina08 

 

Sorry, misread the question, yes the 2019 financial year. 

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Devotee Registered Tax Practitioner

Replies 3

Agree with Macfanboy.

 

signed a share transfer document and handed the transfer and share script to the Stock Exchange on 21 June 2019.

 

Stock exchange is all electronic, so paper forms are for off-market transfers of shares.

 

So basically, the CGT event incurred on 10 July 2019 which will include on 2020 FY?

No  -  21 June 2019

CGT date is date of transaction not date of settlement.  For paper forms, that means date signatures are complete.

 

 Is there any easier method to calculate the CGT for shares?

 

Sell    200,000

Cost   165,000

Gain     35,000   x 50%   =   17,500  taxable  if it was not BHP

 

BHP has had reconstructions and demergers (Bluescope, OneSteel)  that have changed the cost base during that time period

.

 

 

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Initiate

Replies 2

How about if she also incurred a capital 10,000 loss from another CGT event in 2019/2020?


Thanks!

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Devotee Registered Tax Practitioner

Replies 1

How about if she also incurred a capital 10,000 loss from another CGT event in 2019/2020?

 

That would have no bearing on capital gains in 2019.

 

If the loss was in 2019 or carried forward from an earlier year, then the loss offsets the gain before discount is applied.

 

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Initiate

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Thanks for clarifying this to me.

Have a great day!