Capital gains/losses - which is best for this situation? FY 21-22

[mspym]

Since people were so helpful last time I asked about AMIT, I have another situation I could use some help to work through, as I haven't done this before.

Most of my taxable holdings are in a Vanguard managed fund, with my trusty spreadsheet tracking the adjusted cost bases as I go along. So far so good. This year I sold 150k worth to buy a house. I need to work out which units I will be recording as sold and I am trying to work out whether it's better to sell off
a) the higher cost units and have a capital loss that I can use either to offset capital distributions now or in the future
b) a mix so I net out at no liability
c) the lowest cost units. Thanks to the market drop, there is not a notable difference between the buy/sell prices but would be significant when it eventually recovers.

Considerations
- this is likely to be my last significant tax year as I have downshifted. I don't think anticipate earning my previous income again. I expect to be in the lowest 2 tax brackets from now on.
- I had a high-paying contract for 6 months and would normally expect a sizable refund due to the partial year worked and additional quarterly taxes already paid. I've also reduced my income by concessional contributions up to the cap.
- I would like to maximise my return this year but also reduce the risk of future tax liabilities, albeit when my income is a lot lower.
- In a few years we will be moving to New Zealand and I am not sure whether I will want to move my money to the NZ market when we do.

Thoughts? Recommendations? all help welcomed.

[deborah]

Just to be clear, when you are talking about “this year” are you actually talking about 2021-2022 financial year, which was last financial year, even though it ended only a few days ago?

[mspym]

Yes. I’ll it that in the title

[deborah]

Obviously, I’d not be selling units that are less than 12 months old, since they probably get double the capital gains tax.

Given that you’ll be earning less in future, I’d be selling the units with the highest cost base, to reduce your current tax, unless you end up carrying your capital losses into further financial years. It may be that you’re never going to use those capital losses to offset capital gains.

However, this gets to the question of what you intend to do with your investments in the future. You may intend to keep them and live off the dividends and earnings. You may intend to sell them all gradually, and add them to your superannuation (doing this gradually could keep you under the tax threshold each year, and be more tax efficient). As you will have NZ residency, you may want to sell gradually, and add to the NZ equivalent. You probably need advice from someone with experience in both systems.