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Trading Shares held in trust, and cost base for CGT

Discussion in 'Shares' started by sandyjim85, 27th Apr, 2009.

  1. sandyjim85

    sandyjim85 New Member

    Joined:
    27th Apr, 2009
    Posts:
    1
    Location:
    Armidale, NSW
    As a young child, my parents bought some St George shares in trust for me. Initially they purchased 100 shares, and through a dividend reinvestment plan over the next 20 years I accumulated a total of around 320. These were recently converted to around 500 Westpac shares worth around $10,000. I am considering getting a margin loan over them, and in order to do this, I understand I have to do an off market transfer so they are held only in my name (instead of in trust). Will this trigger a CGT event for my parents?

    I also have no paper records for the DRP transactions between 1987 and 1992, so am unable to accurately calculate a cost base for CGT purposes. What can I do about this?
     
  2. jabba_jones

    jabba_jones Well-Known Member

    Joined:
    2nd Dec, 2007
    Posts:
    60
    Location:
    Sydney
    It would trigger a CGT event for the trust and at the end of the financial year and any realised cap gains would have to be distributed to beneficiaries or be taxed at the top marginal rate.

    A company like AIMS-STM will be able to reconstruct your portfolio with correct cost bases purely based on purchases and sales (even easier if its just a single purchase!)
     
  3. Jenni

    Jenni Active Member

    Joined:
    27th May, 2009
    Posts:
    34
    Location:
    Brisbane, Qld
    Hi

    I think that you will actually find that shares held in trust by a parent for a child do not trigger CGT when transferred into the child's name. If it is a family trust that held the shares then CGT would apply.

    Some company websites will give you all the DRP details. Remember you are legally required to keep all documentation for several years after you sell the shares!!