Share parcel CGT question

G'day all,

This is the first time that I have dabbled with some shares. Without me putting any effort into reading, can someone please answer a simple CGT question.

I bought some shares (A) which I have now held for over 12 months without a transaction.

I am now interested in selling a portion of the shares (A) and buying back a similar dollar amount (B) as part of a Share Purchase Plan. In theory, I will be selling at a higher price than I will be buying back and this will allow for the accumulation of more shares.

I am assuming that this portion of sold shares (A) will be subject to a 50% reduction, and (B) will be bought back with a new CGT event date.

My question is, if I decide to trade all of my newly acquired shares (B), and buy back again (C) at a lower share price but the same value, is it only this one parcel of shares that have reset their CGT date?

Another way of asking, do I get to choose which shares I sold, or are there any another considerations?

Sorry for confusing everyone. Cheers.
 
Are you asking something like this?:

A. Buy 100 ANZ shares at $20 each,
B. then a week later buy another 100 ANZ shares at $22 each.

1 year later sell 100 ANZ shares. Which shares had you sold, A or B?

I'v often wondered about this myself, but don't know the answer for sure, but I suspect it is the first aquired is considered the first sold.
 
I'v often wondered about this myself, but don't know the answer for sure, but I suspect it is the first aquired is considered the first sold.

I've always used the figure which has been most profitable. Now you've got me wondering. :confused:
 
Each individual share is a separate CGT asset.

Provided you have kept enough paperwork to track the individual costs, then you can choose which shares to sell.

So you could choose to sell shares with the highest cost base or shares with the discount concession. Alternatively you could choose to sell shares with the biggest capital gain to use up capital losses.

Note that merely selling and buying back the same security to reset the cost base and/or realise a loss might be considered a 'wash sale' under certain circumstances. Its up to you to ensure your circumstances are OK (TR 2008/1).

Cheers,

Rob
 
Thanks for the reply guys.

Terry, spot on as always. I've got a few more accumulation parcels than just an (A) and a (B) though. I'll keep the excel document going. I also wondered whether the purchase sequence was relevant. It didn't make sense though to not have control over each share.

Thanks for your answer Rob. I thought that must be the case, but wasn't familiar with the crazy world of share trading. I'll be using the trade as a means of accumulation so the tax ruling won't be applicable.

Wish me luck with these shares cos the misses is going to bash me if I'm unsuccessful. Just left enough money to buy a protective helmet in times of need.
 
The ATO has no first in/first out policy.

If you buy the new shares offered via the purchase plan first, you can then sell the equivalent number and nominate the most recent ones as the parcel you are selling. You will, of course get no CGT benefit so nominating the older ones may be smarter.

It's your call.
 
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