Securities Tax Manager (STM)

STM automates the maintenance of your share portfolio and optimises your current tax year’s CGT liability with a minimum of fuss.

Getting Started with STM

There are only 3 things you have to do to get started.

  1. Set up your client code, name and type of fund e.g Individual, Superannuation, Company, Trust or Trading Account.
  2. Arrange to receive notice of your trades by email from your brokers.
  3. Import your HIN/SRN numbers of each security holding in your fund's portfolio from an excel spreadsheet

Once you have set up these 3 things then you need to put your client data into STM. You can do this by either:

  • Transferring portfolios from other systems. eSTM Pty Ltd provide advice and software tools to help you transfer portfolios from other systems and spreadsheets. STM has a full range of import functions.
  • Importing trades from broker contract notes or from trade lists downloaded from the broker website.

Corporate Actions Covered by STM

STM operates with 3 central databases of corporate actions that are applicable to all portfolios.

The 3 databases are:

1. Listed Securities Database

  • Includes corporate actions from the start of CGT in Australia on 20 September 1985 onwards
  • Updates are provided to the central database, weekly, monthly or quarterly
  • Import only purchases and sales. Corporate actions (eg bonus issues, dividends, distributions including trust tax deferred amounts and other tax components) are included in portfolios automatically. Difficult areas such as dividend and bonus re-investment schemes, partly paid shares, instalment receipts, convertible preference shares, capital reconstructions (splits, consolidations and returns of capital), take-overs, corporate demergers and stapled securities are handled with ease since all or most of the work is done for users automatically
  • Generates dividend lists automatically
  • Automates changes to company names and codes
  • For complex takeovers such as the takeover of Coles by Wesfarmers, all you need to do is choose which option you took (i.e max cash, max shares, etc..) and STM will do the rest to calculate your tax parcels and tax costs.

2. Managed Funds Datbase

  • Uses APIR codes as the unique identifier of funds and the managed funds database contains the APIR codes and fund names of some 13,000 funds.
  • Contains distribution and tax component information for nearly two thousand funds. For PST’s, gains and losses are identified as exempt.
  • Includes the accrual start and end dates for each distribution and the ex and pay dates.

3. User Maintained

  • Trust codes and distributions are set up and maintained by users. This has the same functionality as the STM Managed Fund Database. It contains the CGT indexing and discounting rules. Other corporate actions applicable to internal trusts are added as required.
  • Fixed interest securities and unlisted companies can also be set up in this database.

STM Import and Export functionality

STM can import transactions and balances from a large number of sources including:

  • Contract notes from all major stock brokers (more than 20 are supported at the time of writing)
  • Transaction data files, and holdings statements provided by brokers
  • PAM
  • HiPortfolio
  • BGL
  • Solution 6
  • Customisable imports are available to import data from Excel spreadsheets and other sources

Using Straight Through Processing, most imports and exports can be scheduled to run at any time. Imports can also be configured to load directly from emails.


Stapled securities

Please note that stapled securities are required for tax compliance.

In STM:

  • Enter stapled security trades like any other security.
  • STM automates apportions costs for purchases and proceeds for sales to the underlying securities.
  • Apportionment ratios are held within STM’s central database and are automatically updated when new ratios become available.
  • The tax components of the underlying securities’ distributions/dividends are automatically applied with the correct tax year.
  • Realised and Unrealised CGT and income reports may be viewed at both the head and the underlying levels

STM - CGT Reports

Securities Tax Manager provides the following reporting:

  1. Income Reporting

    Payments by companies and trusts (including listed and unlisted managed funds)

    Detailed component breakdown of payments, such as franked amounts, franking and foreign tax credits, foreign income, interest, distributed capital gains, returns of capital, tax deferred amounts and LIC deductions.

  2. CGT reports

    STM has a full range of realised and unrealised reports including CGT Schedules and Mark-to-Market (revaluation) reports for superannuation funds. Report data can be saved to file and copied and pasted into Excel sheets.

  3. 45 Day Rule Reports

    STM automates parcel picking to LIFO basis to produce 45 day rule reports

  4. Accounting Reports

    Accounting cost reports are calculated on the basis of parcels selected for CGT result


STM - Parcel Selection

STM automatically executes CGT calculations based on your choices for:

  • Parcel selection
  • Loss offset

Within each of the following methods there is the ability to preserve pre CGT parcels unless absolutely necessary to fulfil a sale.

  1. Optimisation methods

    The default method used matches purchases with sales so that at the time of the sale the highest cost purchase is selected (Minimum Gain-Maximum Loss). This is called optimisation at the time of the sale. Alternatively the lowest cost parcel can be selected (Maximum Gain-Minimum Loss).

    The parcel selection can be:

  2. Time methods

    Parcel selection can be made on a time basis of selection such as First-In-First-Out (FIFO) or Last-In-Last-Out (LIFO).

  3. Average method

    Parcel selection can be on an equitable approach such as prorata whereby each sale chooses a portion of each purchase. The portion chosen at the time of the sale is based on the share each purchase has to the total holding of that security at that time.

  4. Optimal method

    The ultimate in optimisation is to review the whole tax year and obtain the Minimum Gain- Maximum Loss pathway through the year. This results from purchase cost adjusting through the year from application of both tax deferred amounts and parcels changing from undiscounted to discounted within the year. This method is currently in pilot testing.

  5. Own Selection method

    You can make your own choices as to what purchase to use for any particular sale or part of a sale.


STM - Use of losses

If any losses occur they can be advantageously used against CGT gains.

The loss net off methods supported are:

  1. Pick as you go method

    The losses can be used optimally against gains once the gain is selected Undiscounted, indexed and discounted gains are used in an algorithm to make the losses go as far as they can to minimise the total CGT liability.

  2. Loss Optimisation method

    A more sophisticated method is to use the losses on the total gains while considering any use of discount gains if undiscount gains are not chosen because they were not lowest gain, thereby making the losses go further in reducing the total realised and unrealised CGT liabilities. This method is currently in pilot testing.


Training and Support

We offer the following training services for STM:

  • Training and full telephone support including Quarterly Update Notes
  • Quarterly update notes are included in STM and explain how STM handles more complicated corporate actions in addition to new functionality in the system.