CGT eligibility trap found with IPO
One particular IPO occurring just after 9 November 2016 has caused some confusion as to whether the CGT relief can be applied to this particular asset, says a technical expert.
SuperConcepts executive manager of SMSF technical and private wealth Graeme Colley explained that in November 2016 Ingham's Chicken undertook an initial public offering with some trustees purchasing these shares around 6 November 2016.
Given that the issue didn't technically take place till 11 November 2016, this created confusion as to whether the CGT relief could actually be applied to these shares, he explained.
"So people were saying well I can reset the cost base, but the answer is actually that they can't, because the shares weren't issued until after 9 November," he clarified.
While Mr Colley said Ingham's Chicken is the only IPO that he is aware of where this was a problem, there may be other IPOs that occurred in November 2016 that could likewise be affected.
Miranda Brownlee is the deputy editor of SMSF Adviser, which is the leading source of news, strategy and educational content for professionals working in the SMSF sector.
Since joining the team in 2014, Miranda has been responsible for breaking some of the biggest superannuation stories in Australia, and has reported extensively on technical strategy and legislative updates. Miranda has also directed SMSF Adviser's print publication for several years.
Miranda also has broad business and financial services reporting experience, having written for titles including Investor Daily, ifa and Accountants Daily.