“The [individual applicants] retain beneficial and economic ownership of the lent stock, including full exposure to dividends and corporate actions, and exposure to market risk. The transaction can be reversed at any time.”
Extract from Page 5 of the FSG document (April 2005 version) signed by Opes Prime clients.


Tuesday, April 1, 2008

Tax implications for Opes clients

Are the ATO going to sink the boot into Opes clients? Apparently the shares held in Opes accounts were in some sort of ownership twilight zone. Transferring shares into Opes somehow didn't trigger a CGT event therefore clients are faced with not being able to write the shares off as a loss until the liquidation is finished. This could take years. So there is no ability to offset any capital gains made this year and no capital left for clients to draw down upon to pay the tax bill!Is this right?? If so many Opes clients will be sent to the wall via the tax office.
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1 comment:

Anonymous said...

Remember, the client has 'beneficial ownership'. This includes any profits or losses on shares sold. So, if you bought shares at $1 and the receiver has sold them at $2, you pay CGT on the profit. But wait....you only got a pittance back from the receiver. So you have lost your money twice!

April 6, 2008 at 3:09 PM

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