Are Capital Gains Based On Trade Date Or Settlement Date?

Are Capital Gains Based On Trade Date Or Settlement Date?

Are you wondering whether capital gains are based on trade date or settlement
date? If so, you’re not alone. This is a common question for many Australians,
especially those who are new to investing.

The answer to this question depends on the type of asset you’re investing in and
the market you’re trading in. In Australia, capital gains are generally based on
the settlement date. This means that the date when the transaction is settled
and the asset is transferred to the buyer is the date used to calculate capital
gains.

For example, if you purchase shares on the Australian Stock Exchange (ASX), the
settlement date is the date when the shares are transferred to your account.
This is usually two business days after the trade date. The capital gains are
calculated based on the settlement date, not the trade date.

The same applies to other assets such as property, commodities, and derivatives.
The settlement date is the date when the asset is transferred to the buyer and
the capital gains are calculated based on this date.

It’s important to note that the settlement date may be different in other
markets. For example, in the US, the settlement date is usually three business
days after the trade date. So, if you’re investing in US markets, you need to be
aware of the settlement date to ensure you’re calculating your capital gains
correctly.

It’s also important to remember that capital gains are only applicable to assets
that are held for more than 12 months. If you sell an asset within 12 months of
purchasing it, any gains you make are considered to be short-term capital gains
and are taxed at your marginal tax rate.

At Ello Lending, we understand that investing can be confusing and overwhelming.
That’s why we’re here to help. Our team of experienced mortgage brokers are here
to answer any questions you have and help you to get a home loan. We’ll work
with you to find the best loan for your needs and provide you with the support
and guidance you need to make the right decisions.

So, if you’re looking for a home loan or have any questions about capital gains,
don’t hesitate to get in touch with us. We’re here to help.