Capital Gains Tax on Shares Australia (2025–26)

When you sell shares, ETFs or managed fund units in Australia for more than you paid, the profit is a capital gain and is subject to CGT. The same rules apply whether you trade on the ASX, hold international shares, or receive distributions from a managed fund.

This guide covers how CGT applies to shares, what goes into your cost base, how to handle multiple parcels and how capital losses can offset your gains.

Calculate now: Use the Capital Gains Tax Calculator to estimate CGT on your share sale.

How CGT on shares is calculated

Step	Formula
1	Sale proceeds = Sale price − Selling brokerage
2	Cost base = Purchase price + Buying brokerage
3	Capital gain = Sale proceeds − Cost base
4	Subtract capital losses (current-year + carried-forward)
5	Apply 50% discount (if held 12+ months, individual)
6	Net capital gain added to taxable income

Cost base for shares

Your cost base for shares includes:

Element	Examples
Purchase price	Price you paid per unit × number of units
Buying brokerage	Broker commission, platform fees at purchase
Selling brokerage	Broker commission, platform fees at sale
Advisory fees	Financial adviser fees directly related to acquisition

What is NOT part of the cost base

Interest on a margin loan (this is a tax deduction, not cost base)
Platform subscription fees (not tied to a specific acquisition)
Franking credits (these reduce your income tax, not your CGT)

Multiple parcels and CGT

If you bought the same shares at different times (e.g. regular investments in the same ETF), each purchase is a separate parcel with its own:

Acquisition date
Cost base
12-month discount eligibility

When selling, you must identify which parcel(s) you are selling. The ATO allows you to choose which parcels to sell first, which can be used strategically:

Strategy	When to use
Sell oldest first	To maximise 12-month discount eligibility
Sell highest cost base first	To minimise the capital gain
Sell loss-making parcels	To harvest capital losses for offset

Example — two parcels

Parcel	Bought	Price	Brokerage	Cost base
Parcel 1	Jan 2023	$10,000	$10	$10,010
Parcel 2	Mar 2025	$12,000	$10	$12,010

If you sell Parcel 1 in April 2026 for $14,000 (minus $10 brokerage):

Capital gain = $13,990 − $10,010 = $3,980
Held 3+ years → 50% discount → $1,990 added to income

Dividend reinvestment plans (DRP)

DRP shares are treated as separate parcels acquired at the DRP price on the reinvestment date. Each reinvestment creates a new parcel with its own cost base and acquisition date.

Key points:

The cost base is the DRP issue price (usually shown on your distribution statement)
Each DRP allocation is a separate parcel for the 12-month test
You need records of every DRP allocation to calculate CGT correctly

Tip: Keep your annual distribution statements — they show the DRP price and number of units allocated.

Capital losses from shares

When you sell shares for less than your cost base, you make a capital loss.

How losses work

Current-year losses must be applied against current-year gains
Losses are applied before any CGT discount
Unused losses carry forward indefinitely
Capital losses cannot be deducted against salary, wages or other income
You cannot create an artificial loss by selling to a related party (wash sale rules apply)

Loss harvesting strategy

Selling underperforming shares before 30 June can crystallise capital losses that offset gains you made during the year. This is sometimes called tax-loss harvesting.

Rules to be aware of:

You must genuinely dispose of the asset — the ATO can disregard schemes entered into for the sole purpose of creating a tax benefit
If you buy back the same (or substantially similar) shares within a short period, the ATO may treat it as a wash sale

ETFs and managed funds

ETFs and managed funds can distribute capital gains to you even if you did not sell any units. These distributions are reported on your annual tax statement and must be included in your tax return.

Distribution type	CGT treatment
Capital gains — discounted	Already discounted by the fund; include at face value
Capital gains — other	Full amount included in your net capital gains
CGT concession amount	Not directly taxable but may affect your cost base

When you sell your ETF or fund units, the CGT calculation uses your cost base minus any CGT concession amounts that have reduced it.

Record keeping

The ATO requires you to keep records for 5 years after you lodge the tax return that includes the CGT event. For shares, this means keeping:

Buy and sell contract notes (with brokerage shown)
DRP statements showing issue price and units
Distribution statements (especially CGT components)
Records of any corporate actions (splits, mergers, demergers)

Tip: Most online brokers provide historical trade data, but it is your responsibility to keep records — especially if you change brokers.

Capital Gains Tax Calculator Australia — complete CGT overview
Capital Gains Tax on Property — if you also have property investments
Capital Gains Tax on Crypto — similar rules for crypto assets
CGT Cost Base Explained — the 5 elements of cost base
CGT Discount & Indexation Methods — 50% discount vs indexation

Important: This guide is general information only and does not constitute tax or financial advice. Consider consulting a registered tax agent or financial adviser for your individual circumstances.

Capital Gains Tax on Shares