Minimising Capital Gains Tax on Shares

I want to sell my shares and also minimise any CGT I'm up for.
As I plan to take early retirement in the next few months (and live off my Super income stream), am I right in thinking that I should sell my shares after I retire because (once retired), my income will be 0$ so I can then sell my shares and won't pay any CGT up to the $18,200 tax free threshold?

Am I correct on the above?

Thanks

Comments

    • +11 votes

      I would suggest you get a tax agent to help you;

      Only accurate thing in the post….

      Ignore the rest :)

  • +5 votes

    You would need to sell them in the financial year that you expect to have no taxable income.

  • +8 votes

    Sorry - just wait til the crash and sell at a loss. No CGT

  • -2 votes

    Keep shared for over 12 months and you pay 30or50% on profits. Can’t rmember which one it was

  • -1 vote

    Well I think personally it's best to hold it into perpetuity and pass it onto your children and hope they hold it into perpetuity as well. That way you don't have to pay any CGT.

    However, if you have some left over tax free threshold. You should sell down some to crystalise that CGT and effectively pay zero tax on it.

    • -2 votes

      You know company's can go bankrupt right ? The longer you hold onto any share, the higher the risk of bankruptcy. Shares are not a multi generational investment, if you want something like that, buy gold.

      •  

        Great logic for your mortgage too. Most companies don't go bankrupt due to time.

      • +1 vote

        Maybe micro stocks/ start up companies. Not Many large companies shut up shop

        • +1 vote

          Not Many large companies shut up shop

          You must have a short memory.

          from 2018:
          Napoleon Perdis
          Cosmopolitan Magazine
          Diana Ferrari
          Roger David
          toysRus
          Espirit
          Max Brenner
          Sumo Salad
          Laura Ashley

          2017:
          Oroton
          Network Ten

          way back:
          BondCorp
          onetel
          Qintex

          The list goes on & on & on

          •  

            @brad1-8tsi: I wouldn't call half of those large. And out of over 2000 companies listed in the ASX, that number isn't that big.

            •  

              @Danstar: They certainly weren't large when they went into administration.:-)

              Seriously, to say "not many large companies shut up shop" is so wrong in a broader sense. The potential to lose significant amounts of capital on the share market without careful selection of stocks is quite high.

              If you'd bought Flight Centre for $65 in jul 2018 you'd be fairly annoyed with the current sub $45 price.

              Or Platinum Asset mgmt for $8+ in Feb 2018 and it's been down hill ever since (<$4.50 now).

              IOOF, AMP, etc None small companies

              • +1 vote

                @brad1-8tsi: So would you say the majority of 'larger' companies stay open or shut down ?

                •  

                  @Danstar: i would say "choose your stocks and your buy price carefully and you'll make good money but be aware when they are going irreversibly backwards and get out quick."

                  Have you been investing in the share market very long and would you consider yourself successful in your investments?

                  • +1 vote

                    @brad1-8tsi: I've been very successful, mainly dealing with micro stocks.

                    I regret not investing in some of some major companies that have steadily increased over the years, but I found I was spending too much time concentrating on the share market, over my actual full time job. So I've halted my trading for the time being.

                    Ps. Successful in contrast to my budget that is.

  •  

    From a purely tax minimisation perspective (i.e. with no regard to the investment outlook or any other perspective), you should (1) only sell your shares as you need the money as there is no point in selling shares, crystallising a gain/tax bill only to not need the cash in that year, and (2) sell the shares in years when income from other sources is as low as possible.

    You will want to give consideration any superannuation and pension payments in this mix.

    As ever, it is always best to speak to your accountant before taking any action.

  •  

    Thanks for your replies - I will find a financial advisor and discuss selling them with him/her.
    I've owned most of my shares for 15 to 20 years and now want to rethink my investment strategy; maybe have more cash available as I'm concerned about a major correction in the share market in the next 6 to 12 months.
    On the other hand, I could be wrong and miss out on another 25% gain on the share market - who knows! :>).

    •  

      mind to share your portfolio ?

    •  

      If you have Woolworths shares from 15 years ago. If the price drops 30% you still get the dividend which probably won't go down as people don't eat 30% less.

      There is research that with corrections like the 20% drop last year dividends didn't drop 20%. If you don't need to don't sell it.

  •  

    If all you want is money, try using your shares as collateral for a loan.

  •  

    You are correct. If you retire next financial year and sell your shares, the capital gain up to $18200 is tax free. From $18101 to $37000 ,tax is 19%.
    As you have held the shares for longer than 12 months ,50% of your capital gain is excluded from the calculations

  •  

    Do you have any carry over capital losses or any dogs that you wish to unload?

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