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Hybrid securities spurring CGT relief woes

Hybrid securities spurring CGT relief woes

Hybrid securities spurring CGT relief woes
Miranda Brownlee
11 October 2017

SMSF practitioners and their clients are facing difficulties in determining whether certain types of hybrid securities are eligible for the CGT relief or not, according to a technical expert.

Speaking to SMSF Adviser, SuperConcepts executive manager of technical and private wealth Graeme Colley said one of the issues SMSF practitioners are seeing with CGT relief at the moment is whether certain types of hybrid securities are regarded as traditional securities or not, which affects their eligibility for the relief.

“You’ve got things like term deposits which are traditional securities so you don’t get a reset for that, but then other hybrids have different features about them and some might be traditional securities and some may not,” explained Mr Colley.

“You really need to look at the prospectus and whether there is a class ruling from the ATO to work out if it meets the definition of a traditional security or not.”

Mr Colley said it was important to determine whether the hybrid securities in the SMSF are eligible for CGT relief in case the client wants to take advantage of the opportunity to reset the cost base of those assets.

Hybrid securities spurring CGT relief woes
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