Normal
My understanding is that if there is no reasonable expectation of receiving dividends, any interest incurred would not be deductible but would rather be added into the cost base when doing the CGT calc, known as a third element of the cost base. See ato link https://www.ato.gov.au/General/Capital-gains-tax/Working-out-your-capital-gain-or-loss/Cost-base/Elements-of-the-cost-base-and-reduced-cost-base/Example, you paid $10,000 for a parcel of shares that produce no dividends, over 5 years you incur interest of $2,500 as you borrowed the $10k, and you receive $20,000 when you sell after 5 yrs..Capital proceeds of $20k, less $12.5k cost base (includes interest) = cap gain of $7,500, 50% CGT discount of $3,750 applied and thus $3,750 is taxed at marginal rate.Just my understanding.
My understanding is that if there is no reasonable expectation of receiving dividends, any interest incurred would not be deductible but would rather be added into the cost base when doing the CGT calc, known as a third element of the cost base. See ato link https://www.ato.gov.au/General/Capital-gains-tax/Working-out-your-capital-gain-or-loss/Cost-base/Elements-of-the-cost-base-and-reduced-cost-base/
Example, you paid $10,000 for a parcel of shares that produce no dividends, over 5 years you incur interest of $2,500 as you borrowed the $10k, and you receive $20,000 when you sell after 5 yrs..
Capital proceeds of $20k, less $12.5k cost base (includes interest) = cap gain of $7,500, 50% CGT discount of $3,750 applied and thus $3,750 is taxed at marginal rate.
Just my understanding.
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