Commsec told me recently that I am not able to settle shares purchased in foreign companies by my Australian dollar bank account. I must now set up and use an American bank account for these transactions, which means I need to estimate the Australian dollars I need to put into this account. What alternative do I have? A.W.

It's a narrowing market, as I note that CommSec acquired TD Waterhouse in Australia while both dragondirect and HSBC, which once offered overseas share purchases online, have linked up with E*Trade, whose website doesn't mention overseas trades. I understand that CommSec's change is due to its US broker, Pershing (a subsidiary of Bank Of New York), changing its procedures. I can't see why Pershing would reduce its currency risk in this fashion since the customer would be carrying the costs of converting your Australian dollars into US dollars after placing the order. Perhaps they can settle faster if the money is already in a US account.

Goldman Sachs JBWere offers trades in Australian dollars in some overseas shares, including the US, with a minimum brokerage rate of $99 for the first $10,000, or 1per cent thereafter. GSJBW also offers wholesale foreign exchange rates. Macquarie offers online US share trading. The website doesn't offer much accessible information but I understand that payments are drawn on your Australian dollar account to settle US dollar purchases.

Calculating capital gains

I have had CSR shares since 1977. I started with 200 shares but due to the dividend reinvestment plan and bonus share issues, by 1998, I had accumulated 2000 shares. When Rinker Group was split from CSR, I had 2000 shares of Rinker Group. Please advise how to calculate any CGT when Rinker Group was taken over by Cemex on June 6, 2007. I still have my 2000 CSR shares. A.P.

You have a lot of calculating to do. CSR shares demerged in 2003 into one CSR and one Rinker share. Your pre-1985 CSR shares produced pre-'85 CSR and Rinker shares, and thus free of CGT on sale, along with any bonus issues allotted to them. However, any dividend reinvestments on those shares after September 19, 1985, will be classified as post-'85 shares, subject to CGT, as will any bonus shares allotted to them.

For your post-'85 shares, the cost base just before the demerger is spread in the ratio of 25 per cent new CSR and 75 per cent Rinker. And dont forget CSR's 2005 20? return of capital.

Home is where the art is

My husband and I are considering some career-changing options that involve moving interstate. My husband is planning to set up a business interstate, however I need to stay in Sydney for work. We plan to lease the home and I will rent a small property near where I work and my husband will either rent (or buy) a property interstate. Is our family home still considered our principal place of residence or is capital gains tax payable if we decide to sell it because we have moved out? E.T.

Your husband can move out of his home and rent it for up to six years, provided he does not claim another home as a prime residence. The rental income is taxable and maintenance and running costs are deductible from the income. However, the tax office deems many such expenses to be capital costs, as are renovation charges, and thus not deductible. You should explore this complex topic with a tax accountant. If you buy a property in your name and live in it, then it should be regarded as your prime residence and you would be a first homeowner. If you then leave it to move back into a new marital home, a married couple cannot claim two prime residences unless they live apart.

Tax implications on property

My husband and I bought a property in 1973 as joint tenants and used it as an office. We never lived there. He died in 1998 and I inherited the property, valued at the date of his death at $250,000. I presume if I was to sell it now, half would be CGT-free and half would incur CGT on the inherited half of the profit. I calculate sale of this property would probably be about $430,000. My son now lives in the house and I want to transfer ownership to him. What would be the tax implications of such a move? B.S.

You would be deemed to have owned a post-'85 asset from 1998, being 50 per cent of the property. Transferring the house would incur CGT on the profit of that post-'85 asset, ie, the difference between $215,000 and $125,000, or $90,000. Thus 50 per cent, or $45,000, would be added to your assessable income that financial year. This could be counterbalanced if you are able to salary-sacrifice $45,000 that year, if employed, or making a personal deductible (concessional contribution, in the jargon) if retired and under 65 or if over 65 and working.

If you transfer only the pre-'85 share of the house, there will be no CGT. It will convert to a post-'85 asset in his hands but, if he continues to use the house as his prime residence, it will remain free of CGT.

However, your retained post-'85 share will continue to accrue a CGT liability as you are not claiming it as your prime residence.

If your son intends to live there for a decade or more, and you are able to reduce your CGT liability through super contributions, it may be worthwhile in the long term to transfer the house to him now. The amount of stamp duty payable will depend on whether you transfer 50per cent or 100 per cent of the house. Can your son pay the taxes for you?

If you have a question for George Cochrane send it to Personal Investment, PO Box 3001, Tamarama, NSW, 2026. Helplines: bank ombudsman 1300 780 808; pensions 132 800.