u/SabrinaLsn

I’m looking for some thoughts on a parcel of AFIC shares I bought for my 9 yo daughter and whether my original tax strategy still makes sense after the recent budget announcement around 30% min tax on capital gains.

A few years ago, I bought AFIC shares in a CommSec Minor Trust account for my daughter (currently 9 years old). As such, the shares are legally held in her name as a minor.

The shares have been on AFIC’s DSSP, so instead of cash dividends, we’ve been receiving bonus shares. My understanding is this means there hasn’t been taxable dividend income each year, but the cost base reduces over time with the bonus shares.

Total Purchases of 2 x $20 parcel:

• 3,198 shares in June 2020 @ $6.12
• 2,440 shares in Nov 2021 @ $8.19
• Total 5,638 shares purchase (~$40k cost).
• Today, I have 6,848 after the DSSP bonus shares (~$45k worth @ $6.63 today).

The original plan was:

• Hold until she turns 18yo as an adult
• Then gradually sell parcels over a few financial years while she has little or no income to minimise any tax liability for her.

AFIC hasn’t exactly performed amazingly. Total purchase cost was roughly $40k, and today the holding is worth only around $45k including all the DSSP bonus shares accumulated over the years (6,848 x $6.30 today = ~ $45k).

Given the recent budget announcements particularly the 30% minimum tax rates on capital gains, I’m now wondering whether I should just sell the whole lot and dump the money into my mortgage offset instead.

A few questions:

1. If I sell now, I assume the CGT event is triggered for my daughter, not me. Is that correct?
2. Does the sale have any impact on my own personal tax return at all?
3. Am I thinking about the tax correctly?
   • Roughly $5k capital gain
   • 50% CGT discount applies (held >12 months)
   • So ~$2.5k taxable gain
   • Then taxed at minor penalty rates (~47%) since she’s under 18

Also, are there any other implications I should be thinking about if realising the gain while she’s still a minor