Author Topic: Capital gains on selling a Vanguard fund from outside Australia  (Read 1187 times)

BrakeForTurtles

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The day has finally come to consolidate the investments that I can. In 2012 I started investing in a Vanguard fund, just by putting in the minimum amount ($5000) and then not adding anything after that because I decided to go back to school. Now the fund has around $7500 in it, and I want to withdraw this and transfer it to my investments in Canada (where I live now). I have procrastinated doing this but now I have the paperwork filled out and ready to go.

Am I right in calculating that the capital gain from selling this fund will be 50% of $2500 (or whatever the exact difference ends up being), so I will have $1250 added to my taxable income? My Canadian income also has to be reported in Australia, so I will be over the tax-free threshold, but I should still be under the $37K tax bracket. I think this means for the first time in my life I will owe taxes for this financial year. So I should make sure I keep enough in my Australian bank account to cover that. Is there anything else I should consider before I mail my withdrawal form?

Shaz_Au

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Re: Capital gains on selling a Vanguard fund from outside Australia
« Reply #1 on: April 06, 2018, 12:49:09 AM »
Please ignore the following post, it is incorrect.  Sorry for the confusion and thanks for the correction mjr.

Hi B4T,

I believe your Capital Gain is $2500 less any expenses you incurred in making, holding and selling the investment. The 50% CGT discount for holding an investment for over 12 months would mean that the capital gain calculated above would then be taxed at half your marginal tax rate.  In your example it would be ($2500-expenses)*((19/2)/100).  Worse case you are talking $237.50 assuming you stay under in the 37,000 (19% bracket)

Does the CGT discount apply to your international status? Do you pay the Medicare Levy? I have no idea about these and I'm no tax expert but I'm sure there will be someone much more qualified to answer your question along shortly.

Cheers,
Shaz
« Last Edit: April 09, 2018, 05:34:19 PM by Shaz_Au »

mjr

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Re: Capital gains on selling a Vanguard fund from outside Australia
« Reply #2 on: April 06, 2018, 11:41:51 AM »
Incorrect.  OP is correct, the 50% discount applies to the capital gain which is then taxed at marginal rates.  The discount does not apply to the marginal rate directly.

BrakeForTurtles

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Re: Capital gains on selling a Vanguard fund from outside Australia
« Reply #3 on: July 23, 2018, 04:46:42 PM »
So, I got my tax statement from Vanguard and I'm quite confused. I sold all my units around May, but as far as I can tell my capital gains don't show up on the statement. The total capital gains listed is $74.58, instead of ~$2500. Am I actually required to calculate the gains myself based on how much I bought and sold the units for? Or is there something I'm missing on the tax statement. Any help greatly appreciated!

mjr

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Re: Capital gains on selling a Vanguard fund from outside Australia
« Reply #4 on: July 23, 2018, 05:00:26 PM »
I expect that the capital gains reported in your tax statement are capital gains that they returned to you during the year as a component of your distributions.  It's a tax statement for the last financial year only.

Yes, you'll have to work out the capital gains that you realised as a consequence of your buy and sell transactions of the units in the managed fund, which of course is over several years.

BrakeForTurtles

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Re: Capital gains on selling a Vanguard fund from outside Australia
« Reply #5 on: July 23, 2018, 05:52:45 PM »
Ok, thanks so much! As there was only one buy transaction and one sell transaction it's pretty straightforward, but I'll have to keep this in mind for the future when I buy any other non-tax-sheltered funds.

marty998

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Re: Capital gains on selling a Vanguard fund from outside Australia
« Reply #6 on: July 27, 2018, 05:01:56 AM »
Are you still an Australian resident for tax purposes given that you live in Canada?

The 50% CGT discount for non-residents was removed in 2012.