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Can purchasing shares be a tax deduction?

Discussion in 'Accounting, Tax & Legal' started by Jughead, 2nd Apr, 2010.

  1. Jughead

    Jughead New Member

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    Brisbane
    Hi All, new to this site and cannot find this question in any of the forums.

    I have some shares that I want to sell very soon. How ever it will mean i have to pay a big chunk of capital gains tax this year. My question is if I invest in new shares this financial year can I claim that as a tax deduction in this year or can that only be done when you sell the new shares?
     
  2. AsxBroker

    AsxBroker Well-Known Member

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    Hi Jughead,

    Why would you think you could claim a tax deduction?

    I think you may be thinking about carrying over losses from previous capital losses, not claiming a tax deduction on buying an asset.

    Cheers,

    Dan

    PS This is general information and does not take into account your personal situation. Before making an investment decision speak to your FPA registered Financial Planner.
     
  3. Wood Accounting

    Wood Accounting New Member

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    Sydney, NSW
    Not unless you make a CGT loss on the new shares buy selling at a loss before 30 June.

    Why is it that no one want to pay tax on capital gains? I suppose most do not consider it when buying the shares at the start.
     
  4. MattR

    MattR Well-Known Member

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    When you talk of shares as a tax deduction you are talking of them "on revenue account" as opposed to "on capital account".

    Shares for most people are on "capital account".

    If you were in the business of share trading then they would be on "revenue account" and you could claim them as a deduction. However, at the end of each year you would still have "stock on hand" just like any other business.

    Generally, most people like capital account when they have gains, and then all of a sudden they think revenue account when they have losses :( . Not that easy unfortunately.
     
  5. Jughead

    Jughead New Member

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    Hi All and thanks for your replys,

    First things first did I say I was new to the site? I meant I am new to shares and have no idea.

    I purchased the shares a few years back, the first shares I have ever got into and the plan was they were an investment, so I could buy all the wool that I could ever want for my knitting when I was a little old lady. So I guess you are safe to say I am not a trader. lol.

    They started to do better and I thought I could sell them in a year that I don't work and self fund myself when I start a family. They have done too well and I think it's best to offload them now but if I do that now the tax man will take a large part of the gain since I have worked this year and well its just a big dent out of self funding a family for a year or two.

    I understand that I have had the shares for over 12months so I will only get charged the cgt on 50%. Is that correct?

    I don't think there is much I can do about it but just pay the tax or don't sell the shares. Lets face it this is not the worst thing that could happen to a person in their life, doh my shares went real well, maybe a change in attitude is all I need.

    I have enjoyed reading things on this site and have started a small fund to buy more shares. I do look forwards to learning more about the markets and how it can help me make my money work for me.

    Thanks you all seem lovely!

    P.s I guess this means my shares are a capital account MattR.
     
  6. AsxBroker

    AsxBroker Well-Known Member

    Joined:
    8th Sep, 2007
    Posts:
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    Location:
    Sydney, NSW
    Hi JugHead,

    Depending on your situation maybe you should speak to an FPA registered Financial Planner.

    Cheers,

    Dan