Experts in CGT Reconstruction & Optimisation

STM - Parcel Selection

STM automatically executes CGT calculations based on your choices for:

• Parcel selection
• Loss offset

1. Optimisation methods

The default method used matches purchases with sales so that at the time of the sale the highest cost purchase is selected (Minimum Gain-Maximum Loss). This is called optimisation at the time of the sale. Alternatively the lowest cost parcel can be selected (Maximum Gain-Minimum Loss).

The parcel selection can be:

• Locked at time of sale before cost adjustments such as tax deferred are known; Or
• Locked after the tax component information is available

2. Time methods

Parcel selection can be made on a time basis of selection such as First-In-First-Out (FIFO) or Last-In-Last-Out (LIFO).

3. Average method

Parcel selection can be on an equitable approach such as prorata whereby each sale chooses a portion of each purchase. The portion chosen at the time of the sale is based on the share each purchase has to the total holding of that security at that time.

4. Optimal method

The ultimate in optimisation is to review the whole tax year and obtain the Minimum Gain- Maximum Loss pathway through the year. This results from purchase cost adjusting through the year from application of both tax deferred amounts and parcels changing from undiscounted to discounted within the year. This method is currently in pilot testing.

5. Own Selection method

You can make your own choices as to what purchase to use for any particular sale or part of a sale.