Before We Go The UML thread is likely to close soon unless...

Before We Go

The UML thread is likely to close soon unless there's a Lynching but before we go . . . . .


Gymjunky asked:
what is the scheme consideration mean can someone explain it to me.
Does this affect the TAX even though i'm writing off about 130k in Capitol losses .What about BLK


curiouswon gave Gymjunky a good answer . . . . .

see page45 (section 6) of Explanatory Booklet for tax explanation.
essentially two transactions:
1. capital return i.e. reduction (which is a CGT event only if profitable, i.e. cost base less than 1.0c) which reduces cost base
2. disposal which is a CGT event (profit or loss) per normal rules


I would add this . . . . . . .
Usually capital returns are tax free but those gamblers who bought UML at $0.008 (I was tempted)
will have $0.002 attracting Capital Gains Tax. (1.0cent minus 0.8cents = 0.2cents taxable.)
On the 2.2 cents portion, they would be taxed the full CGT as the shares were held for less than 12 months
but they'd be laughing all the way to the bank instead of crying into my beer because I didn't
buy a few at $0.008. when I had the chance.


With 130k in losses you are likely to have a tax holiday for a while unless you have earnings that offset those losses.
I have an horrendous loss on UML which has been more than offset by paper profits elsewhere but as I have not crystallised
those paper profit (by selling the profitable shares) I shall be carrying forward my UML losses into next financial year
and perhaps beyond.



Gymjunky, get yourself a good reliable, solid accountant, one that you have easy access to when you have a query.
Choosing an accountant is like choosing a dentist. Good luck to anyone who finds an absolutely brilliant accountant
but for the rest of us, what we want is reliability and ease of access. My preference is a local firm with two or three partners.
Avoid the overworked or underworked single accountant in a glass fronted shop offering electronic tax lodgements
because good accountants tend to amalgamate, employ more staff and take on a more challenging type of work.

Make up a little list of local possible accountants and show the list to your bank manager or if your bank is distant,
(eg, ComSec Margin Loan clients bank in Collins Street, Melbourne) ask the manager at any local bank about local accountants.

Bear in mind that the average Joe Blow and your mate at the bowls club would not know a good accountant from an astronaut.
We don't want a hail-fellow-well-met, slap-on-the-back, joke-telling, flattering accountant. Avoid the chap who won't do a thing
for you until he does your next tax return. A good accountant can look at whatever books or records that you take along and
give you a sensible opinion there and then. Avoid the guy who seems preoccupied with taxation. We are not here to fiddle tax ;
we are here to make money by investing what little we have.

Be aware that now there is a trend for accountants to get new clients to switch software, to switch to whatever accounting
software the firm prefers. That might be a good thing in some cases or it might be a nuisance. I'd rather have a tooth puled
out than change software. We don't need incredible share trading software. We need a simple accounting package that is
easy to operate. Some people keep track of all the dividends and imputation credits on a computer spreadsheet.
Whatever you do, keep it simple and keep it up to date.

We need a reliable accountant who produces good simple easy to understand reports. If you want
brilliant ideas and schemes, get them separately elsewhere. There are gurus galore for the asking.

I keep all my shares on CHESS registers which keep everything up to date. The CHESS reports are brilliant.
From my accountant, I get a Profit and Loss Statement, Cash Flow Report, and Balance Sheet and all the
statutory SMSF stuff. Anyone who finds those reports mysterious should take a short course at the local TAFE
or Adult Night Classes, doing either Cashbook Accounting or Simple Accounting.A few nights well spent can make
a lifetime of difference to us. When things are explained properly they become simple and easy to understand.

You asked what companies to invest in now and you asked about BLK. A good place to start is to make up a list of
companies that other people mention and do your own research which means do a lot of reading and cross checking.
Make up your own rules. I stick to Australian companies with Australian operations. Some people like to play
Russian Roulette in Africa. Good luck to them. Some people think they can make money at the race track.
We choose our own path in life. None of us can see around the next bend.

A six month's subscription to GoldNerds, www.goldnerds.com.au every other year is a good idea.
Use GoldNerds to choose between established producers and to choose between near producers or recent producers.
Use it to choose between BLK and RMS and GCY for example. GoldNerds analyses data. It can't tell us much about ERM
yet due to lack of data. The ground up at Tennant Creek is so patchy that analysis and predictions are impossible.
ERM is a big gamble like Russian Roulette but it could go off with a bang.

Lastly, spare a thought for all those who came aboard UML from Cortona Resources. Every one of them has suffered big losses.

Hasta la vista, Amigos !