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Fairly sure the ATO also gets at least sell dates (from my...

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throwawayaccount

273 Posts.

28/02/17

19:57

Post #: 22987286
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Originally posted by Strawman68 ↑

Toscanunan - whilst you are absolutely correct in that there is a rule - there are some parts of it where it uses the words "maybe ineligible' the legislation does not in itself definitely make it "inegligible" last time my tax agent (large firm) dealt with this (re this shows on your link which is still current for the current financial year for those wondering about the 2013-14 reference). This rule starts off by saying "Your entitlement to a franking tax offset may be affected by" - therein lies the particular point, its not definitive and like most of our laws and legislations this language causes loopholes that smart ones (unfortunately this usually means only the rich of our society rather than everyone) who can afford advice can use to their advantage as did EPW with the LRECs (personally good on them) - until our learned politicians or maybe more importantly the ones who write the legislation start to understand the private/company/capitalist ways then maybe we will have rules that apply to all, not just those who can afford them.

Further if you have already held the stock for 45 days and then sell ex dividend then certainly you are absolutely safe in either the theory work or the practical world.

You will find that no information is actually provided to the ATO that would disclose whether you have only hold it for 45 days in your tax return - you only are required to put in the box on your individual personal tax return (for arguments sake) capital gains made in the year (or losses) and then the 50% rule concession - obviously holding anything less than 12 months means no concession - but no where on any tax return does the buy date and the sell date within a 12 month period is required to be shown.

My understanding from my tax agent from just over a year ago on this issue (large firm) is that the ATO doesn't actually look at this stuff and they have never ever heard of any action in this regard, because at the end of the day, the company has paid tax, and its shareholders are claiming the franking credit (bar those overseas etc) and it would be seen as the ATO unfairly gaining if they started targeting what is essentially the big end of town - we all have seen that before and not letting shareholders claim franking credits.

As I said in an earlier post - don't confuse 'theory' with 'practical' - sometimes they are worlds apart - fortunately or unfortunately depending on how you view it.

Now this certainly might change in the future at some time when the ATO gets access to all buy and sell trades by each holder, at present they are simply provided details from the registers of dividends paid and franking credits for each TFN during the year.

These days it appears that if you want to get ahead you have to understand the rules and also the loopholes otherwise you never seem to win unfortunately.

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Fairly sure the ATO also gets at least sell dates (from my experience of the tax man telling me i had sold shares on x date)...the ATO can probably work out buy date to within 6 months based on divi payments..

But yeah. As you point out, it's a question of if they can be bothered practically at the moment...though that's not to say, they won't subsequently retrospectively audit you in the future....

I got audited once ...ended owing a few hundred, plus interest, from about 5 years back.

Last edited by throwawayaccount: Words 28/02/17

EPW Price at posting: $1.12 Sentiment: Buy Disclosure: Held
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