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.