Newbie with Question

[Pete5000]

Firstly, Hi Guys!! I just joined up.

I had a question relating to my shares and tax and came across this site whilst googling for an answer.
Anyway I'm hardly a big investor and the only shares I hold are one's from the company I work for.
I have recently been tempted to sell a few as I need some extra money.
The nagging question is tax and everything that paying it or avoiding it entails.
You see I have slowly collected these over the last 5 years by the way of having a small percentage of my wage deducted each month and I get shares each quarter. The company is Canadian so the shares sit with a Canadian brokerage firm.
I know that your supposed to declare profits from shares but as I have purchased these in small lots over 5 years and dont even know how I'd work out what the nett gain on these would be. So I'm tempted in dumping some of these shares to the value of just under 10k AU and not bother about declaring. I know the ato checks against stock plans but as this one is based overseas and the transaction is under 10k, how risky would this be?
If its super risky, how detailed do I have to be with what i declare. Over this time we have changed from the company managing the scheme and sending us direct certificates, to one broker and now to another. I dont even have an easy view of how much I paid versus what they are worth today and the gain is not anything significant. Hence why im just thinking of going stuff it and not mentioning it to the tax man.

Ideas, suggestions, warnings???

Oh and thanks in advance

Pete

 

[Whiskers]

Firstly, Hi Guys!! I just joined up.

I had a question relating to my shares and tax and came across this site whilst googling for an answer.
Anyway I'm hardly a big investor and the only shares I hold are one's from the company I work for.
I have recently been tempted to sell a few as I need some extra money.
The nagging question is tax and everything that paying it or avoiding it entails.
You see I have slowly collected these over the last 5 years by the way of having a small percentage of my wage deducted each month and I get shares each quarter. The company is Canadian so the shares sit with a Canadian brokerage firm.
I know that your supposed to declare profits from shares but as I have purchased these in small lots over 5 years and dont even know how I'd work out what the nett gain on these would be. So I'm tempted in dumping some of these shares to the value of just under 10k AU and not bother about declaring. I know the ato checks against stock plans but as this one is based overseas and the transaction is under 10k, how risky would this be?
If its super risky, how detailed do I have to be with what i declare. Over this time we have changed from the company managing the scheme and sending us direct certificates, to one broker and now to another. I dont even have an easy view of how much I paid versus what they are worth today and the gain is not anything significant. Hence why im just thinking of going stuff it and not mentioning it to the tax man.

Ideas, suggestions, warnings???

Oh and thanks in advance

Pete

Need more info.

Have you always worked in Australia or sometime overseas?

When you say you have a small percentage of you wage deducted to pay for the shares, is that a salary sacrifice arrangement or a voluntary thing on your part to buy shares?

Does the company trade on the ASX?

If you don't want to name it you can ask your boss or look here http://www.asx.com.au/research/companies/index.htm

 

[GreatPig]

Pete,

Don't assume the ATO don't look at this forum

If it's an employee share scheme, the tax considerations can be different to normal shares. Try asking your company accountant.

And don't you have a record of each purchase transaction, giving the purchase price of each parcel? Maybe your company does in its records.

GP

 

[Pete5000]

Need more info.

Have you always worked in Australia or sometime overseas?

When you say you have a small percentage of you wage deducted to pay for the shares, is that a salary sacrifice arrangement or a voluntary thing on your part to buy shares?

Does the company trade on the ASX?

If you don't want to name it you can ask your boss or look here http://www.asx.com.au/research/companies/index.htm

Thanks for the response Whiskers.

To answer your questions;

1. Ive always worked in Australia.
2. Its salary sacrifice.
3. No, only on the TSX and nasdaq.

 

[Pete5000]

Pete,

Don't assume the ATO don't look at this forum

If it's an employee share scheme, the tax considerations can be different to normal shares. Try asking your company accountant.

And don't you have a record of each purchase transaction, giving the purchase price of each parcel? Maybe your company does in its records.

GP

Yeah I figured they might look at sites like this. However as the stock has changed very little over time the gain would be so minimal that I doubt this would interest them too much.
Also I'm sure my company has records of how many shares and at what price each one was given but as its small amounts over a long period and the fact Im not planning on selling the whole lot, which shares do i try and work this out on? It just seems like such an arduous task when I know I havent made any large profit on this thing, more used it as a savings plan of sorts.

 

[lusk]

Yeah I figured they might look at sites like this. However as the stock has changed very little over time the gain would be so minimal that I doubt this would interest them too much.

Then why worry about declaring it on your tax? If you've had them for over a year the amount your taxed will be reduced anyway. This share plan sounds like what l had with a US company called an Employee Share Purchase Plan. Do you get the shares at a discount? l think it also becomes a fringe benifit if you do.

 

[xtanda]

Other consideration that in the 'accumulation buy' like you did, First in First Out will be applied, hence the 50% CGT of the holding probably will be quite large. If we can use average value (not FIFO) it will be better.... check with your accountant I guess....

btw, I am from ATO... : ... just kidding....

 

[Pete5000]

Then why worry about declaring it on your tax? If you've had them for over a year the amount your taxed will be reduced anyway. This share plan sounds like what l had with a US company called an Employee Share Purchase Plan. Do you get the shares at a discount? l think it also becomes a fringe benifit if you do.

That's exactly it. Same name and all. The discount is small though.

Yeah see this is why I thought I'd ask people that might know...I know if i had a decent portfolio and made some decent gains or losses I'd work that into my income at tax time. However cos its minimal gain and in my eyes required lots of work to do I wanted to avoid it. At the same time though I dont want to go through an audit just because im trying to get out of doing some work.

 

[Pete5000]

Other consideration that in the 'accumulation buy' like you did, First in First Out will be applied, hence the 50% CGT of the holding probably will be quite large. If we can use average value (not FIFO) it will be better.... check with your accountant I guess....

btw, I am from ATO... : ... just kidding....

Ok so at least that clears up which stocks I'd be looking at to make my calculations. Thanks for that.

 

[Whiskers]

Looks like these guys have pretty well sorted it out for you, Pete5000.

Originally Posted by GreatPig
Pete,

Don't assume the ATO don't look at this forum

If it's an employee share scheme, the tax considerations can be different to normal shares. Try asking your company accountant.

Originally Posted by lusk
Do you get the shares at a discount? l think it also becomes a fringe benifit if you do.

I would also check with accountant before selling to consider the terms of the employee share purchase plan and as xtanda says find out what accounting methods you have open to you for best results.

Since you are Aus resident and work in Aus, it may be worth checking if they will buy back some shares. This may save some brokerage and trouble and expense transfering money back to Aus.

 

[shinobi346]

Also check that you can sell them too. Some companies make their employees hold the shares for a min amount of time before they can be sold.