Join our investing community

Accounting for capital gains

Discussion in 'Accounting, Tax & Legal' started by Simon Hampel, 19th Jan, 2007.

  1. Simon Hampel

    Simon Hampel Co-founder Staff Member

    Joined:
    9th Jun, 2005
    Posts:
    4,619
    Location:
    Sydney, Australia
    A question for Nick (I'll ask it here for everyone's benefit ... there may be others in the same situation).

    I acquired units in a managed fund through my trust, and then later, I used them as collateral for a margin loan (ie I transferred them to my margin account).

    I have since redeemed the units, and have received a statements from the fund manager which shows the capital gains/losses for the holdings.

    However, their statement calculates the gains from the time the units were transferred to the margin lender, and don't take into account the time previously held directly by my trust.

    Am I correct in asserting that the statement from the fund manager is incorrect, and I should calculate the gains/losses from the original acquisition date by my trust ?
     
  2. NickM

    NickM Co-founder Staff Member

    Joined:
    20th Jun, 2005
    Posts:
    321
    Location:
    Sydney
    Hi Sim
    The holding has not changed. I suggest you contact the fund manager and ask them this exact same question as the date of acquisition of the first parcel was the initial date.
    There would be a 2nd date being the date you transferred to the margin lender and assuming you acquired further units at that time.
    NIckM
     
  3. Simon Hampel

    Simon Hampel Co-founder Staff Member

    Joined:
    9th Jun, 2005
    Posts:
    4,619
    Location:
    Sydney, Australia
    I suspect the problem is that the unitholder number has changed with the move into the margin loan - so it may be that their system considers this to be a separate investor ... I'll ask them.
     
  4. Simon Hampel

    Simon Hampel Co-founder Staff Member

    Joined:
    9th Jun, 2005
    Posts:
    4,619
    Location:
    Sydney, Australia
    I just received confirmation from the fund manager that if there was no change in beneficial owner, then the original purchase date should have remained. It is only with a change in beneficial owner that the dates change (the transaction for CGT purposes becomes a sale for the original owner and a purchase by the new owner as of the transaction date).

    In this case, it was simply a refinance, and it was the change of name on the account (to the margin lender's nomiee account) that caused the system to think there had been a change in beneficial ownership.

    They said they will correct the error and re-issue the statement.