BT Private Portfolio - Tax efficiencies

More effective tax management

Investors may choose individually held portfolios like BT Private Portfolio to manage their tax position more effectively.

At your overall portfolio level

Ability to choose tax accounting methods

BT Private Portfolio offers you a choice of tax accounting methods. These are:

  • Maximise capital losses or if no capital losses are available minimise capital gains
  • First In First Out method
  • Maximise capital gains or if no capital gains available minimise your capital losses.
Portfolio structuring

BT's Private Portfolio managers aim to manage the ‘portfolio blueprints’ for tax efficiency. The portfolio manager will attempt to structure the portfolio, and time the transactions, to minimise the tax impact while maximising performance in line with the objectives and risk/return profiles of the ‘portfolio blueprints’. This may provide you with improved after tax returns.

At your portfolio blueprint level

Individual cost base from portfolio blueprints

As you directly own Australian shares and listed property through BT Private Portfolio, you obtain the tax benefits from having your own individual cost base for these securities. This is different to more traditional managed investments where you share ownership of the underlying shares together with all the other investors in the fund and you may be liable for capital gains generated before the day you invested in that fund.

The following table summarises the taxation outcomes that may occur from investing in the portfolio blueprints.

  BT Private Portfolio blueprints Managed funds

Ownership

You havea direct beneficial interest in listed shares and property trusts.

You hold units in a fund that invests in listed shares and property trusts. The beneficial interest in the fund's assets is divided proportionally amongst all unit holders.

Capital gains tax (CGT) liability

Individually held listed shares and listed property are purchased for you so you do not inherit pre-existing CGT liabilities.

You may inherit any unrealised CGT liabilities already in the fund (possibly since inception).

Investment selection

You can add your own holdings and exclude any holdings you wish to avoid.

You have an interest in a proportion of the whole pre-selected basket.

Transfer of existing assets

You can transfer into your portfolio existing share holdings usually without triggering CGT (as long as there is no change in beneficial ownership).

Not normally possible.

After tax returns

The timing and method of the asset sales may lead to higher after-tax returns.

Sales and purchases of assets are made on behalf of the whole fund.  Any realised net capital gain is distributed by the fund, and any excess realised capital losses are carried forward in the fund to offset future realised capital gains.