2021 BRN Discussion, page-6723

In the hypothetical case if the full thirty thousand dollars worth of shares were sold then tax would be payable on the proceeds above the tax free threshold so the eight thousand dollars worth does not get sold so that only an amount that will generate a profit of less than or equal to the tax free threshold is sold. When the shares are bought back on 1 July, 2021 they now have a new cost base and so if the shares continue to go up until end of the 2021/2022 tax year the same process could be gone through again and a further tax free threshold amount stored away so that forty four thousand dollars of profits going forward become tax free in five years it would mean that over $100,000 of the profits that would have otherwise been taxable would be stored away as tax free in the holding.

Perhaps if I put it this way it will be easier to follow. Assume you have sitting in your BRN shares $44,000 in profits on the 30 June, 2021. If you sold those shares on that day to take your profits you would be liable to claim the tax free threshold of $22,000 leaving $22,000 on which tax will be paid after the 50% capital gains discount if held for more than 12 months meaning that there would be tax to pay on $11,000. If however you sold half of your shares on 30 June, 2021 making $22,000 profit as this equals the tax free threshold you have no tax to pay. If you then sell the other half on the 1st July, 2021 making $22,000 profit as this will equal your tax free threshold for this new financial year you will pay no tax.

Simple strategies can save large amounts of profit in percentage terms so taking advice from an accountant even on a one time only basis can be very profitable to an investor even if they believe they only have a very small investment and it is only the big end of town that needs tax advice. It is just not true. The big end of town may with their advice save 5 or 6% and it is millions. In the above example the little end of town could save 25% to 30% of their profits. The little end of town is the easy target for the tax office because of this attitude that there is nothing they can do.

As I say this is not tax advice it is may way of getting people who are invested here and held for in some cases years to get the right advice and ensure they maximise the outcome of having taken considerable risk.

My opinion only DYOR
FF.


AKIDA Ballista