How is the costbase worked out? and is there anywhere in Sharesight that shows how the costbase was derived. My sums, CMC sums and sharesight’s are different in several cases.
My first thought was it is the cost of the stocks purchase, including brokerage.
The cost base seems to get complicated when any shares are sold from the holding. If anyone can show me how it is done, I would be grateful.
The calculation will depend upon how you have setup the allocation method. When you run the CGT Report you can modify the sale allocation method (you can choose a portfolio default, set the allocation method for a time period, and apply it to specific shares in the portfolio for the time period). Have a look at the instructions here - CGT Report | Sharesight Australia Help
Note also that dividends/distribution payments can include a capital component. These are highlighted in Sharesight in the column Cost Base Adjustments in the income section. Any amount in the Cost Base Adjustments will reduce the total cost base amount. It is also possible for a company to do a Return of Capital - these are displayed in Sharesight under the Trades and Adjustments section. I’m not sure that these corporate actions are applied automatically in Sharesight - you might have to apply them manually.
Thank you for your answer @Naedish. Most of the ‘Return of Capital’ transactions are automated in Sharesight.
Thanks @Naedish . I did some digging in Sharesight and found the CGT options. I can see now why my sums and Sharesights are different. My SMSF is in pension phase, meaning we pay no CGT or Income tax. So, averaging my holdings seems the most practical. This makes the Sharesight reporting of little use, as its reports are very different to mine and the brokers. I would like to see a CGT/Income Tax option of 100% discount.
Talking with my brokers(CMC), they said their automated SELL does not sell from any specific parcels, (FIFO,LIFO etc) but average the entire holding…just as I do. Due to no tax implications, I have never asked the brokers to sell from parcels, as I would have to sell from the desk at greater cost per trade.
I can see now why my spreadsheet is pretty close to the brokers profit/loss sheet as we both average. But Sharesight follows the ATO CGT route.
No worries @Ged. Your SMSF situation would actually be very easy for ShareSight to support as none of your funds are in accumulation. It would get more complicated if you have members of the fund not in pension phase or if you have a member with funds above the $1.6M cap.
@Piumi_Sharesight - might I suggest that some of these SMSF situations be looked at as a feature request? It’s going to become even more important as SMSF’s can now have up to 6 members, so the scenario of having to apply an ECPI to the SMSF income will no doubt become more common.
Hi @Naedish I have purposely kept the SMSF to one active member with ECPI to simplify end of year SMSF tax.
Hi @Piumi_Sharesight . Agree, I will request Sharesight consider a ECPI friendly version as a feature request, that way I can use reports that are more performance based, rather than CGT. As you would know, all of an SMSF’s assets (with ECPI) must be valued at current market value and generally, capital losses can’t be applied to capital gains. Indeed, Capital gains and losses are disregarded if a capital gains tax event occurs in relation to a segregated current pension asset, which my SMSF is classed as.
So, because the Cost base applied to my holdings in Sharesight will be based on the CGT rules, and not ECPI rules, the cost base for my stock parcels will be incorrect when a sale occurs.
Thank you @Naedish @Ged. Please feel free to add your ideas on SMSFs in our ‘feature ideas’ section following the given format. This helps us to evaluate your ideas as the other users will also contribute by adding their thoughts.
If you are in pension phase my understanding is you still get the capital gains discount of 33% but it makes no difference as you do not need pay CGT. So if the capital gain $100 it goes into the tax return as $67. Then this is multiplied by the rate of zero of course equaling zero. If your fund has members in accumulation and pension phase and you are not segregating then this would be split according to the percentages given by the actuary. The auditor of my SMSF has no trouble accepting the CGT report straight from SS. I have one member in pension and one in accumulation.
Hi goronwyprice, thanks for the reply. Fortunately, my SMSF admin is connected to my CMC brokerage account and can see all the transactions, making most of the tax return and audit fairly painless. I do note though, my SMSF admin seem to carry out the tax return as if I was paying income/cgt taxes, but at the end, it all gets zeroed due to ECPI, as you mentioned.
My SMSF only has one active member in pension.
My issue was more about the actual reporting within Sharesight.
Looking at most sharesight reports, they are based upon paying tax of some sort, making the base cost and resultant profit is different, for my needs due to the ECPI.
I just had a look at the Sharesight reports. It really only comes up on the Capital Gains Tax Report. In this case, just choose the figure above the CGT tax concession as the tax concession does not apply. I guess SS could have an option when you select SMSF as the account type to have “All Members In Pension Phase” and the system does not calculate the CGT when this is selected. In any other case, the system does need to calculate the CGT at the SMSF concession rate of 33%. I really like the fact that it calculates this for me, one less thing to think about. Since I have had SS I have been able to work out my SMSF Tax return without the accountant, making my admin costs zero.
Hi goron…
Thanks for the reply.
Looking at the 9 reports available to me, 5 seem to have CG involvement, and 4 no CG involvement.
Performance includes CG*
Sold Securities includes CG*
Future Income. OK
Diversity. OK
Taxable Income. OK
Capital Gains Tax includes CG*
historical Cost. Includes CG*
All Trades. OK
Unrealised CG. Includes CG*
CG* will mean costbase differences causing different report values.
I could take the reports into my spreadsheet and try and normalise the CG event, and the cost base, but this removes the convenience of the SS reports, and may introduces my errors.
Maybe the fix is as simple as providing 100% discount in some areas and getting the cost base to be the average the 2 or more parcels of the same companies shares.
Because my SMSF is in Pension phase, with no other active members, I am looking for performance, rather than taxable reports that reflect the value of my assets, both realised and unrealised, profits, and monies in the bank…or left on the table.
Maybe one day, the Government of the day will change these taxation rules, and I will need to also account for tax measures.