Friday, 13 September 2013

Tax tips, part 15: capital gains

A capital gain (or loss) is basically the difference between what it cost you to acquire and keep an investment asset and what you received when you disposed of it.  Selling an investment (e.g., shares, managed fund units, investment property) is the most common way you can trigger a capital gain or capital loss. Other capital gains events include managed funds’ periodic distributions of capital gains, company liquidations, and mergers and acquisitions.

Managing capital gains requires keeping a number of finicky records, a task that the MoH is truly hopeless at.  The memories of all my share purchases and sales this year keep flooding back to me every time I contemplate starting my tax return.  Each of those no doubt will require numerous searches to ascertain purchase and disposal costs from half-completed tracking registers and the original hard copy confirmation orders that I may or may not have received from my broker … Once you are ready to tackle the subject, capital gains (losses) get calculated in section 18 of your supplementary tax return.