Investor returns can be materially affected by the accounting method and share parcel selection used for calculating gains. Our sophisticated technology uses a three phase CGT optimisation process:

1. Method Selection
When disposing of shares purchased prior to 21st September 1999, investors may elect whether to use the new discount method or the old indexation method for calculating gains. Coppin and Partners Portfolio will automatically select the most advantageous method.

2. Parcel Selection
Coppin and Partners Portfolio provides a number of methods by which lines of stock can be matched to maximise after tax returns.

• Minimise gain- selects parcels to defer gains
• Maximise gain- selects parcels to accelerate gains
• Manual- allows user to manually select parcels to sell
• First In First Out- selects oldest parcels first

Except in the instance of Manual Selection, Coppin and Partners Portfolio will select pre 1985 stock parcels last so as to preserve any pre-CGT assets.

3. Loss Optimisation
Where losses are incurred, Coppin and Partners Portfolio uses two techniques to ensure that the maximum value can be obtained for each loss dollar.

• Sequential loss offsetting- where both discounted and non-discounted gains have been made, Coppin and Partners Portfolio will offset losses against non-discounted gains first.
• Method selection switching- If there is the option of using the indexed method for calculating a taxable gain when offsetting against losses,  Coppin and Partners Portfolio will switch methods on individual disposals if it is more advantageous to use the higher indexed gain to preserve loss dollars. 

Example

Investor returns can be materially affected by the accounting method and share parcel selection used for calculating gains.

For example, assume you had bought three parcels of 100 ABC Bank shares at different times:

2004 100 shares $1.00 per share
2006 100 shares $2.00 per share
2008 100 shares $3.00 per share

If you were to sell 100 of those shares today at $4.00 per share your taxable gain would depend upon which parcel of shares you matched the sale against (parcel selection).

By using a parcel selection method that opts to match the first parcel of shares purchased with those sold (often called FIFO), a higher Capital Gains Tax (CGT) liability would be generated. If however, the selection method was to defer gains, the highest purchase price would be selected and the lowest CGT liability would be incurred.

Whilst taxation can be complicated we recognise the importance of having sophisticated technology coupled with an accounting strength tax engine to provide optimised CGT processing to maximise your after tax returns.

The above example is for demonstration purposes only. You should speak to your financial adviser or accountant to determine which method is suitable for you.