Diamond Accounting

Capital gains on the sale of shares, property and other investments can be reduced by ensuring all eligible items are included in the cost base of the assets sold including the purchase price, capital improvements, stamp duty, legal costs, advertising expenses and commission fees, and by applying any available capital losses. You may be able to further reduce any net gain under the general 50 per cent discount where the asset sold has been owned for more than 12 months.

 The ATO is concerned that capital gains are not being included in tax returns. It has therefore significantly expanded its data-matching in the property and share areas by obtaining data on asset sales from all State / Territory Land Title and State Revenue Offices, the Australian Stock Exchange, share registries and managed funds. The ATO has also advised that it will examine around 6,000 at-risk cases this year including gains on sales where funds were later invested in superannuation. Hence, you should keep buy / sell contract notes for shares and all other purchase and sale agreements and receipts.

The ATO has also announced that it will deny capital losses where the loss on an asset has been applied to reduce some other capital gain, and thereafter the asset sold is either wholly or substantially re-acquired by that person.