Cleaning up your portfolio before June 30

Financial journalist and commentator on 3AW and Sky Business
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With only this week remaining in the financial year, investors should be finalising their tax strategy, which includes capital gains tax (CGT) considerations. It’s time for a review of the portfolio, to reduce CGT by selling any non-performing shares that you may be holding. Selling such a stock gives rise to a tax loss that can potentially be handy, if it’s used to offset a capital gain on another share.

Nobody likes making a capital loss on a stock, but the pain can be assuaged by using the loss to soak up a capital gain that you have – hopefully – earned elsewhere. Use the annoying situation of a loss to reduce the ATO’s take of your capital gains.

The most efficient way to do this is to be on top of your ‘parcels’ of shares: to know exactly when you bought various parcels of your shareholding, so you can use the CGT discount for shares held for more than 12 months.

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