lup - I wish it were as simple as reading a ATO publication. If the paper was softer it could have dots and be serated into little squares.
Westfield investors have NO IDEA on cost base in most cases. Splits, mergers, demergers, rights issues, purchase plans, DRP and reconstructions have left it looking like a mess. And they propose to do it again.
Heaps of companies cost base isnt what the shares were purchased for. BHP, Wesfarmers (Coles), Woolworths etc etc. NAB shares - Many shareholders chose bonus shares in place of DPR over the past 15+ years. Bonus shares erode the cost base. DRP adds to cost base. If you assume the wrong base method the numbers are very different. So if you owned NAB shares did you overpay tax or underpay tax or get it right (many accountants get it wrong...Cause the junior did the work) ??
I regularly encounter client CGT estimates that are just plain wrong. And accountants who do tax returns and get it wrong. Over and under. Best one I saw just a few weeks back. An inexperienced lawyer doing a deceased estate assumed share cost was its cost base. Actual cost base was just 45% of the value they used. They underpaid tax AND left beneficiary with a tax debt. And messed up estate distribution by overpaying one beneficiary and leaving two others with a tax problem. And the lawyer used a tax agent...Who got it really wrong and committed their opinion to writing when the lawyer queried it. It got worse..The agent told lawyer all shares are acquired at death at market value...Problem was all shares were post CGT and so the cost base was flawed from the start....So far its a $400,000 tax problem. So if a tax agent can do that imagine what a DIY taxpayer can do???
We offer a CGT review service and am happy to review issues. For deceased estates it often a huge money saver.
No two companies seem alike..Then there are the trusts that pay tax deferred amounts....It gets worse.