How does one revalue the purchase price of shares to avoid capital gains for the post 2107 Super Fund changes

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Using Reckon Personal Plus 2017. Need to revalue some share purchase prices as at 30th June to avoid capital gains for a Super Fund post changes to the SuperFund rules 1st July 2017
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Julie Hossack

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Posted 11 months ago

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VikingOz

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Not sure why you want to fiddle with the facts. As prices of securities increase there will be an unrealised capital gain. You do not pay tax on unrealised capital gains. You need to retain entry prices to determine profits. You also need entry prices to report your net worth history. Maybe I'm missing your point. I'm not an accountant but have a passion for this stuff... I must get a life.
You only pay tax on realised adjusted capital gains at your applicable tax rate.
(Edited)
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John Campbell

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When you finally "sell", couldn't you use the cost base as the share valuation at 30/6/17 ?

If you question is that you want RPP to report gains since 30/6/17, then I would expect you need to do a sell / buy as at 30/6/17 to reset the RPP cost base. Make sure you note these transactions are based on the GCT relief rules, as I would be bound to forget when finally sell.

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Diver Dave

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John, the benefit of doing a SELL/BUY on June 30 is that when you do come to sell the shares in the future the RPP Capital Gains Report will report the correct taxable gain.  There are no tax implication for recording the SELL on June 30 because the stock is held in a tax exempt environment on that day.
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Diver Dave

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Julie, responses may be "crossing", but by doing the SELL/BUY on June 30, in future RPP will only report Gains/Losses from the revalued "deemed" cost base on June 30.  
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Bob

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This an issue with the recent changes to the super rules if you have member balances of more than $1.6m. As a concession you are entitled to increase the cost base of assets which you would do where there is a profit to be realised if shares are subsequently sold. Where I have purchased one parcel of shares you can increase the cost base through the return of capital option. If you have made multiple puchase of shares (including DRPs) I cannot see how to change the cost base of each purchase.
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Diver Dave

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Bob, the trouble with using the Return of Capital option is that it puts cash into the account, whereas SELL/BUY maintains the correct balance.

Another consideration is that for multiple parcels, Reckon doesn't allocate the Return on a per share basis, so parcels are not correctly valued.

With multiple parcels, I'd suggest selling all of those with un-realised Gains, and buy back as a single parcel.  Leave parcels with losses untouched.
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VikingOz

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If you do change the entry price, you will also change the cash account balance unless you also change the quantity. So much fiddling with the books.
To edit the details, select the transaction... Select Edit... Change the details... I think.
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Diver Dave

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Julie, best way to eliminate the un-realised CGT on June 30, to conform with the new rules, is to SELL any Parcel with a Gain at June 30 Closing Price and BUY it back with the same price.  No change in cash in your account and Cost Base has been reset.  Parcels with an un-realised Losses can be carried forward.

Bear in mind that the 12 month holding period is reset, so no discount available for the next 12 months.
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Julie Hossack

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Bit late to use this strategy but thanks for your advice
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VikingOz

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Tricky... There must be a ligitimate way of recording it, but can't think of it at the moment. Don't have RPP in front of me. I'll be watching for responses.
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Diver Dave

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Don't follow why you say it's too late, Julie.  You can enter the SELL and BUY anytime, just make sure the date is set to June 30.  Is that the problem, or is there something else?
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Julie Hossack

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I see your point now - sounds feasible and shall proceed with this method. I have printouts of our portfolio values from Computershare and Link Services detailing closing price of shares as at 30th June 2017. 
Thank you so much, Julie
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Diver Dave

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No problem - happy to help
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John Campbell

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I would make sure that the prices for June 30 are entered then do a share value report for June 30. You can get that either on the screen or as a report. Just make sure you select the correct date.

I used "portfolio view" and reported for "As of" 30/6/17 and 3/7/17 and got different valuations. You need to confirm you have prices stored for those dates. If you don't you can import the prices using a .csv file (see elsewhere for format)

I am not understanding you can get a CGT assessment at 30 June, as there has not been a CGT related event ?

(Edited)
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Robyn Kelly, Accredited Partner

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I had a client who had a report from their super fund and the date to use for sells and then buys was a specific date (14th June to be exact) so maybe ask the super fund too?

Regards, Robyn Kelly

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Diver Dave

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What was the basis for that advice, Robyn?  Doesn't make sense; it's the ATO that sets the rules.
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Robyn Kelly, Accredited Partner

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Not "advice" Diver Dave, the Super fund statement shows those dates.
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Diver Dave

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That's rather strange, Robyn, as the CGT relief is available from July 1, so the applicable price is the closing price on June 30.  This from the ATO site "

"The CGT relief provisions preserve the income tax exemption for capital gains accrued, but not yet realised, by a complying superannuation fund on CGT assets held throughout the pre-commencement period (see paragraph 7 of this Guideline). CGT relief is provided because a member reduces the value of their superannuation income stream before 1 July 2017 to comply with the start of the transfer balance cap reforms. CGT relief is also provided because of the changed treatment of TRISs from 1 July 2017."

Might be worth checking with your Super Fund.

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