GBST’s tax analysis tool implemented by top firm

Yasmine Raso

Senior Journalist, Financial Newswire

13 September 2022

A top global investment management firm has adopted GBST’s new Pre-Trade Tax Analyser solution to examine the impacts of taxes when trading Australian and Global Equities in Australia.

A first of its kind in the market, the tool assists organisations’ funds that invest in Australian and foreign-listed securities to better understand the consequences of capital gains taxes and franking credit taxes pre-trade and to develop better outcomes for investors.

“We are delighted that another market leading institution has chosen Tax Analyser,” Robert DeDominicis, GBST chief executive, said.

“It is the only stand-alone technology solution in the market today that utilises the latest available custodian tax data and our purpose-built sophisticated calculation engine to allow pre-trade tax aware investing.”

Kathy Taylor-Hoffman, GBST’s Business Solutions Executive, said firms can enjoy better returns when employing more tax-aware investment management methods.

“Capital Gains Tax (CGT) is payable on both Australian and Global Equity disposals. If you sell a capital asset you’ve held for less than 12 months, there can be tax leakage,” she said.

“If capital assets are disposed of by a superannuation fund after having been held for more than 12 months, then potentially only two thirds of the gain will be taxable, saving 5% in tax – this can be a significant amount.

“Similarly, for investment trusts that hold capital assets for 12 months or more, up to half of the gross gain distributed may not be subject to tax by the recipient investor. Further, by ensuring franking credit entitlements from investments in Australian Equities are not lost through the application of the ‘45-day rule’, entities can further improve after-tax outcomes.

“Providing visibility to investment managers regarding the tax impact of a proposed trade prior to trading, is the only way managers can ensure these tax benefits are not inadvertently lost, and we are delighted that our patented solution will be used to achieve this outcome.”