Capital gains tax question

[Init]

I have recently come to the point with one of my investments where it is an ideal time to sell due to a likely transition towards a bearish trend, however I have held onto this stock for a few months short of a year.

My understanding of capital gains tax is that if you have held onto the share for at least 12 months I can use the "discount" method of calculating my CGT. However since I am selling short of 12 months, I lose this discount and must use the "Other" method which incurs more tax.

Do you come across this sort of thing often?
Is there a tool available to calculate which options are mathematically better?

Still a bit new to the tax side of shares, thanks for reading.

 

[cropcos]

Hi Init. Yes, you need to hold the stock for at least twelve months to qualify for the cgt discount. However, you need to look at your tax year holistically. For example, Did you have capital losses carried forward from prior years? Did you make capital losses in the current year? These losses must be offset with any gains ( be it other or discount gains) before you can qualify to discount the gain. If you only had this sale and it was less than 12 months then the gain will be assessed under the other method as you suggest.

 

[So_Cynical]

The 12 months rule is a 2 edged sword, i have had 2 stocks do massive reversals on me while i waited for the 12 months to end (cost me thousands), on the other had i now have a portfolio full of stocks i have held for more than 12 months so everything (pretty much) gets the discount.

I personally would not sell if its just a matter of 3 or even 4 months, perhaps consider selling half and waiting.

 

[WRiley]

Does anybody know the formula to calculate the tax for :-
1) holdings held below 12 months ?
b) holdings held more than 12 months ?

 

[HelloU]

This is your tax position for both situations (in single formula in Excel). Multiply this by your marginal rate and you have your tax liability. Medicare levy is in addition to this.


=IF(AND((Sell Date-Buy Date)/365>1,current value>cost price),(current value-cost price)/2,current value-cost price)