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Brokerage costs & tax

Discussion in 'Accounting, Tax & Legal' started by disco lemon, 29th May, 2008.

  1. disco lemon

    disco lemon Member

    Joined:
    20th May, 2008
    Posts:
    20
    Hi everyone,

    I am trying to ascertain whether brokerage costs are tax deductible, and understand vaguely that they form part of some "cost base" for CGT purposes when the shares are sold.

    With regards to this "cost base" - does that mean I simply subtract the brokerage costs from my CG (or add brokerage costs to capital losses) when I sell the shares?

    Thanks in advance :)
     
  2. Rob G.

    Rob G. Well-Known Member

    Joined:
    6th Jun, 2007
    Posts:
    717
    Location:
    Melbourne, VIC
    Assuming you are an investor, so the shares are on the capital account.

    No deduction for costs of acquisition or disposal.

    They merely add to the cost base.

    This in effect reduces any gain or increases any loss.

    Keep the paperwork for evidence.

    Cheers,

    Rob
     
  3. disco lemon

    disco lemon Member

    Joined:
    20th May, 2008
    Posts:
    20
    Hi Rob,

    Thanks for answering my query. How disappointing: was hoping that brokerage fees could be recouped somewhat.

    And no, I cannot be classified as an investor even in the most vague of terms!
     
  4. Simon Hampel

    Simon Hampel Co-founder Staff Member

    Joined:
    9th Jun, 2005
    Posts:
    4,619
    Location:
    Sydney, Australia
    They are recouped - when you sell, the capital gain is worked out net of brokerage - so you pay less capital gain overall.
     
  5. disco lemon

    disco lemon Member

    Joined:
    20th May, 2008
    Posts:
    20
    Thanks Sim, that's great news!