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CGT and Time of Acquisition and Disposal

To calculate the capital gain or capital loss when disposing of only part of an investment in shares or units, you need to be able to identify which ones you have disposed of.

This can be very important because shares or units bought at different times may have different amounts included in their cost and can alter the amount of tax you may need to pay.

You may own shares or units that you acquired at different times, which happens if you increase your investment in a particular company or unit trust and these may need to be treated in different ways. For example, when you dispose of any shares or units you acquired before 20 September 1985, any capital gain or capital loss you make is generally disregarded.

A common question people ask when they dispose of only part of their investment is – How do I identify the particular shares or units I have disposed of?

If you have the relevant records, for example share certificates, you may be able to identify which particular shares or units you have disposed of. In other cases, The Commissioner of Taxation will accept your selection of the identity of shares disposed of.

Alternatively, you may wish to use a “first in, first out” basis where you treat the first shares or units you bought as being the first you disposed of.

Our dedicated team can assist you with queries relating to how Capital Gains Tax can affect your shares. Complete and submit the Express Enquiry form or call us on +61 2 9223 9166 to arrange an appointment.

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The Quinn Group operates Quinn Consultants, Quinn Lawyers, Quinn Financial Planning and Quinn Financial Solutions. The Quinn Group provides related information in regard to legal, accounting and financial planning issues. Liability limited by a scheme approved under Professional Standards Legislation* *other than for the acts or omissions of financial services licensees.