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CGT discount – 12 months rule

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Newbie

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Hi all,

 

I know there's a lot of stuff online about the CGT discount – the provision that says if you hold shares for more than 12 months you only have to claim 50% of that profit as tax assessable income – but no one ever gets into the nitty gritty about what "12 months" entails.

 

Let's say I purchased shares on 8 May 2019 (being the contract date, so settlement date would be 10 May 2019) and sold that same parcel of shares on 8 May 2020 (being the contract date, so settlement date would be 12 May 2020 because T+2 lapses over a weekend) – what counts as the start and end date being "12 months" for the purposes of the CGT discount? 

 

Is it:

1. From the purchase contract date (08-May-19) to the sale contract date (08-May-20)? If so, that is exactly 12 months so am I correct in saying that it would not attract the CGT discount because it's not "MORE than 12 months"?

            OR

2. From the purchase contract date (08-May-19) to the sale settlement date (12-May-20)?
[This would be more than 12 months = eligible for CGT discount]

            OR

3. From the purchase settlement date (10-May-19) to the sale contract date (08-May-20)?
[This would be less than 12 months = ineligible for CGT discount]

            OR

4. From the purchase settlement date (10-May-19) to the sale settlement date (12-May-20)?
[This would be more than 12 months = eligible for CGT discount]

 

Any help would be greatly appreciated because I accidentally did this buy/sell situation without realising Smiley Sad

 

 

1 ACCEPTED SOLUTION

Accepted Solutions
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Most helpful response

Master

Replies 0

@Anna_H does this page help, under the heading CGT methods and 12 month ownership method.

https://www.ato.gov.au/General/Capital-gains-tax/Working-out-your-capital-gain-or-loss/Working-out-y...

 

1 REPLY 1
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Most helpful response

Master

Replies 0

@Anna_H does this page help, under the heading CGT methods and 12 month ownership method.

https://www.ato.gov.au/General/Capital-gains-tax/Working-out-your-capital-gain-or-loss/Working-out-y...