Davisite,
Thanks for clarification.
ATO can consider whatever it likes to be a wash sale .. Why? because it suits them to do so. This is just another example whereby the ATO legal (interpretation) department should be outsourced or separate to the revenue collection department. You can't have the ATO revenue collection department (with a vested interest) forming an opinion / or interpreting legislation in order that it suits themselves ... that aside.
The ATO may deem the sale of MUSOA and purchase of MUS as a wash transaction ... although the black and white legislation is on your side. It is their opinion / interpretation only. You can always say you read something negative on hotcopper that made you change your mind and sell MUSOA ... and a few hours (preferably days) later you read something positive on hotcopper and changed your mind and purchased MUS shares. Hard for them to prove that you did not change your mid from positive MUS to negative MUS and back to positive MUS (as long as you have proof of what made you change your mind). Don't think ATO would take it to court ... would be too expensive to both parties and depending on amount, not worth it.
More importantly, the CGT discount is not relevant and does not apply re CG losses. Let's say you make a $10,000 (before discount and no discount applies) realised loss on MUOSOA options and also make a $12,000 realised gain on other shares (held for longer than 12 months), before discount, in other words $6,000 after 50% discount.
You will find that when applying this in your income tax return, the $10,000 MUSOA capital loss will be discounted from the "pre" discounted capital gain of $12,000 (not the "post" discounted gain of $6,000. This leaves you with a $2,000 gain ($12,000 less $10,000 loss) to which the 50% discount is later applied, resulting in a $1,000 net gain.
The above is an anomaly with how loses are applied to gains before the 50% discount is applied ... in essence deducting apples for apples and making capital losses irrelevant when applied (in other words, capital losses in essence do not get 50% CGT discount).
In the previous example, if the $12,000 gain were not entitled to discount (sold within 12 months), the $10,000 realised capital loss would be deducted first, resulting n a $2,000 capital gain, which would be final taxable gain as no discount applies.
Sorry for the further clarification and potential confusion ... unfortunately, that is the complexity f tax legislation.
Regards,
zippy
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