Our sophisticated technology uses a three phase tax optimisation process to maximise your after-tax returns

How we can improve your after-tax performance

The Allegiance Portfolio service uses sophisticated technology to enhance after-tax returns through:

1. Method Selection
   When disposing of shares purchased prior to 21st September 1999, investors may elect whether to use the new discount method or the old indexation method for calculating gains. The Allegiance Portfolio software will automatically select the most advantageous method.
2. Parcel Selection
   Allegiance Portfolio provides a number of methods by which lines of stock can be matched to maximise after tax returns.
   • Minimise gain- selects parcels to defer gains
   • Maximise gain- selects parcels to accelerate gains
   • Manual- allows user to manually select parcels to sell
   • First In First Out- selects oldest parcels first
   Note that except for Manual Selection, Allegiance Portfolio will select pre 1985 stock parcels last so as to preserve any pre-CGT assets.
3. Loss Optimisation
   Where losses are incurred, Allegiance Portfolio uses two techniques to ensure that the maximum value can be obtained for each loss dollar.
   • Sequential loss offsetting- where both discounted and non-discounted gains have been made, we will offset losses against non-discounted gains first.
   • Method selection switching- If there is the option of using the indexed method for calculating a taxable gain when offsetting against losses, we will switch methods on individual disposals if it is more advantageous to use the higher indexed gain to preserve loss dollars.

Click here to learn more on how the Allegiance Portfolio service can help you make more informed investment decisions.

Example on parcel selection

Investor returns can be materially affected by the accounting method and share parcel selection used for calculating gains. The example below highlights how parcel selection can affect your tax position.

Assume you had bought three parcels of Commonwealth Bank shares at different times and at different purchase prices.

If you were to sell a parcel of those shares today, your taxable gain would depend upon which parcel of shares you matched the sale against (parcel selection).

By using a parcel selection method that opts to match the first parcel of shares purchased with those sold, a higher Capital Gains Tax (CGT) liability would be incurred if the shares had risen over time . If however, the selection method was to defer gains, the parcel with the highest purchase price would be selected and the lowest CGT liability would be incurred.

Whilst taxation can be complicated we recognise the importance of having sophisticated technology coupled with an accounting strength tax engine to provide optimised CGT processing to maximise your after tax returns.

The above example is for demonstration purposes only. You should speak to your financial adviser or accountant to determine which method is suitable for you. Allegiance Investment Solutions do not provide any tax advice in relation to your personal circumstances.