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Taxation of individual shares versus unit trusts?

Posted 15 August 2014 under Tax Questions


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If I purchase equities, as I understand it, I will need to hold each share for at least three years for any profit to be deemed capital (CGT) and not revenue (full profit included in taxable income.
BUT - if I purchase unit trusts, as I understand it, I can sell them at any time (no 3 year waiting period), and only CGT will apply.
Is my understanding correct, or does the three year rule apply to unit trusts as well?

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TaxTimTaxTim says:
18 August 2014 at 9:36

The three year rule deems all equity investments as capital, but that does not mean that at a time before the three years are up you cannot sell these equities and have them be of a capital nature. It would depend on your original intention when purchasing the shares, whether it was for a scheme of profit making or did you intend to hold them as an investment.


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