Forum Topics Tax Question - AMIT Cost Base Treatment
PeregrineCapital
3 years ago

Hi All,

In the below sequence of events, what is the correct way to treat the cost base decrease from the prior year for CGT purposes?

1) 1/1/2021 Buy 900 units for $900

2) 20/06/2021 Buy 600 units for $500

30/06/21 - AMIT statement details decrease in cost base by $15

3) 15/2/2022 Sell 600 units for $1,000

a) Would I be correct in assuming that the cost base decrease would get applied on a pro rata basis to all units acquired in the proceeding financial years? I.e cost base for purchase 1 becomes $900 - (0.6*15) = $891 and cost base for purchase 2 becomes $500-(0.4*15) = $494?

b) I assume that units are the same as shares in that you can effectively choose which units you are selling? I.e the sale could could be the units from purchase #1 or #2?

Have I got this correct?

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PeregrineCapital
3 years ago

Update :

After scrawling google for days I think the above is the only (small) consensus I could find. To me it sounds logical and reasonably hard to take advantage of. Even the ATO and tax accountants seem can't give a straight answer on this one.....


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Dominator
3 years ago

I was hoping you would get an answer as my search didn't bring anything concrete either when I looked into this previously.

My initial thoughts were that I might need to to do a calculation weighting for days and number of units owned within the year but that seems far to complex... I plan on using Sharesight when I sell to help me work out the right amount if I don't sell all at once.

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PeregrineCapital
3 years ago

Just thinking about it - if you receive a distribution you technically get the whole quarter/half/year for which the distribution was related to attributed to you, even if you only held the units for two days (with one of them being the ex date). For example if you bought units in a fund on the 28/06/22 fund that distributed annually and went ex dist on the 30/06/22 I think that your AMIT Statement would attribute the whole year to you with the cost base adjustment relative to amount of the annual distribution.

Thinking about this from the funds side of things - they would have to do it something like the below:

1) Calculate the taxable income (an components) of the fund for the year.

2) Attribute this to each member based on what cash distributions they received as a % of total distributions paid in the year.

3) The difference between the two is essentially the cost base adjustment on your annual AMIT statement.

Based on the above logic, it would make sense weight the calculation based on distributions received relative to each parcel you hold?

This is just me riffing so could be wrong....

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