In the "old days" the shares you received were numbered and had...

In the "old days" the shares you received were numbered and had certificates. In that case you could sell the numbered shares. This may still be the case deep in the bowels of the ASX (ie shares numbered), however now it is all computerised with HINs and SRNs traders/investors do not get individual share identities, just a holding of a certain number.

The ATO guidelines state that when you sell only a portion of your holdings and you have bought the shares in separate parcels on different days you can apply the sale to shares bought using another method, and gives the "first in, first out" as an EXAMPLE of how you can do it, not as a RULE for how you must do it. I have sought advice on this from a friend who is a corporate tax lawyer/accountant and was told to make use of the imprecise wording of the ATO guidelines and allocate sales to buys as I see fit and to obtain maximal advantage - the ATO must accept this as the guidelines leave it open to this approach and the ATO has no legal comeback against you. I was also told to submit the return at the last possible moment as it may be beneficial to change the parcel you attribute to a sale if the value of that share changes.

Another trick is where you have previously submitted a return maybe claiming the 12 month CGT reduction on a parcel of stock, then subsequently trade the same stock and make a huge profit in under 12 months, you may be able to re-arrange how you allocated things in previous years (eg proportional against separate purchases) to keep the previous years returns unchanged in value but in your records have the profit attributable to different shares, and if you have had a long-term constant holding to cover the trade, claim the 12 month discount. This of course will not work after an audit in which you have to provide details of how you allocated your sales to the ATO. I know this sounds a bit confusing but basically it means that as long as you keep the end of day balance the same for previous tax returns the same and haven't provided the ATO with an itemised list of how these were allocated in the past, you can change them for your benefit, you just have to make sure it all adds up and document how you are now claiming to have allocated sales. This is only likely to help with a blue-chip stock that you have a long-term holding in and also trade.