Potential Billion Dollar Company, page-437

@crgmat - just moving discussion out of the chart thread.

A CGT event only occurs when you sell. You will need to include brokerage (buy and sell) on the partial shares you sold as part of the cost base but when you sell the second portion then you can't include buying brokerage in your cost base, only selling brokerage costs. So basically, you can't claim buying brokerage twice. That's my understanding.

So for example:
Say your initial purchase of SRT was this
100,000 bought @ 2c = $2,000 + $19.95 (brokerage)......cost base = $2,019.95

Then you decided to lock in profit
50,000 sold @ 3c = $1,500 - $19.95 (buy brokerage)

So what I would do is then split the initial purchase into 2 lots of 50,000 shares
50,000 bought @ 2c = $2,000 + $19.95 (buy brokerage)......cost base = $1,019.95
50,000 bought @ 2c = $2,000..........................................cost base = $1,000

So for tax purposes on the first lot you sold
cost base = $1,000 + $19.95 (buy brokerage) + $19.95 (sell brokerage) = $1039.90
$1,500 (sell) - $1039.90 (cost base) = $460.10 profit for CGT at marginal tax rate

Then if you sold the rest after 1 year, say for 5c
cost base = $1,000 + $19.95 (sell brokerage only as you've already claimed buy brokerage on this parcel) = $1,019.95
$2,500 (sell) - $1019.95 (cost base) = $1,480.05 profit with 50% CGT discount at marginal tax rate

I hope I got this right as it's much harder to type it out rather than explain it.