Capital gains on shares sold in Australia

Selling shares triggers a capital gains tax (CGT) event in Australia. Whether you are cashing out a single holding or trimming a position, you need to calculate the capital gain or loss on the sale and include it in your tax return for the financial year.

This guide covers what happens when you sell, how to calculate the gain, and how to handle common situations like partial sales and shares bought at different times.

Disclaimer: This article is for informational purposes only and does not constitute financial or tax advice. Consult a qualified tax professional for advice specific to your circumstances.

CGT event A1: selling your shares

When you sell shares on the ASX (or any listed exchange), the ATO classifies this as CGT event A1, which is the disposal of a CGT asset. This is the most common CGT event for share investors.

The event occurs on the contract date (the trade date when your sell order is executed), not the settlement date (which is typically two business days later for ASX trades).

You must report the capital gain or loss in the financial year when the CGT event occurred. If you sell shares on 29 June 2026, the gain or loss belongs to the 2025-26 financial year, even though settlement occurs in July.

Calculating the gain or loss

The calculation is straightforward:

Capital gain = Capital proceeds - Cost base

If the result is negative, you have a capital loss.

• Capital proceeds: The sale price multiplied by the number of shares, minus selling costs (brokerage fees)
• Cost base: The purchase price multiplied by the number of shares, plus buying costs (brokerage fees)

For a detailed breakdown of what goes into the cost base and how the 50% CGT discount works, see our guide on how to calculate capital gains on shares in Australia.

Handling partial sales

Things get more interesting when you sell only some of your shares in a company, particularly if you bought them at different times and prices.

Which shares are you selling?

The ATO allows you to choose which specific parcels (also called lots or tranches) you are disposing of when you make a partial sale. This gives you some flexibility in managing your tax outcome.

For example, if you own 1,000 shares of ANZ bought across three separate purchases, you can choose which parcel to sell first. This choice can affect:

• Whether the shares qualify for the 50% CGT discount (based on the holding period of the specific parcel)
• The size of the capital gain (based on the cost base of the specific parcel)

The ATO does not mandate a particular method (like first-in-first-out), but you must be consistent and keep clear records of which parcels you are disposing of. TrackMyShares supports specific lot selection when recording a sale, so you can choose exactly which parcels to dispose of and see the tax impact before confirming.

Worked example: selling shares bought at different times

David bought Commonwealth Bank (CBA) shares in three separate transactions:

On 15 March 2026, David sells 250 shares of CBA at $140.00 per share, paying $19.95 in brokerage.

• Net proceeds: (250 x $140.00) - $19.95 = $34,980.05

David needs to decide which parcels make up the 250 shares he is selling. Here are two options:

Option A: Sell Lot 1 (200 shares) + 50 shares from Lot 2

• Cost base for 200 shares from Lot 1: $20,009.95
• Cost base for 50 shares from Lot 2: (50/150) x $17,259.95 = $5,753.32
• Total cost base: $25,763.27
• Capital gain: $34,980.05 - $25,763.27 = $9,216.78

All 250 shares were held for more than 12 months, so the 50% CGT discount applies to the entire gain.

• Discounted gain: $9,216.78 x 50% = $4,608.39

Option B: Sell Lot 3 (100 shares) + Lot 2 (150 shares)

• Cost base for 100 shares from Lot 3: $13,009.95
• Cost base for 150 shares from Lot 2: $17,259.95
• Total cost base: $30,269.90
• Capital gain: $34,980.05 - $30,269.90 = $4,710.15

Lot 2 was held for more than 12 months (purchased July 2024, sold March 2026), so the 50% discount applies to that portion. Lot 3 was held for less than 12 months (purchased March 2025, sold March 2026), so no discount applies to that portion.

• Gain on Lot 2 shares: $34,980.05 x (150/250) - $17,259.95 = $3,728.08. Discounted: $1,864.04
• Gain on Lot 3 shares: $34,980.05 x (100/250) - $13,009.95 = $982.07. No discount.
• Total assessable gain: $1,864.04 + $982.07 = $2,846.11

In this scenario, Option B results in a lower assessable gain ($2,846.11 vs $4,608.39) despite the partial loss of the CGT discount, because the cost base of the newer parcels is higher.

This illustrates why tracking individual lots matters. The right choice depends on your specific situation.

Dividend reinvestment plan (DRP) shares

If you participate in a DRP, each reinvestment creates a new parcel of shares with its own acquisition date and cost base. Over several years, you can accumulate dozens of small parcels.

When you eventually sell, each DRP parcel must be treated as a separate lot for CGT purposes. This makes record keeping particularly important, as the amounts are often small and easy to lose track of.

For example, if you received DRP shares quarterly for three years, you have 12 separate parcels. Selling all your shares means calculating the gain or loss on each parcel individually, with each having a different cost base and holding period.

Record-keeping requirements

The ATO requires you to keep records that show:

• When you acquired the shares (contract notes or trade confirmations)
• What you paid (purchase price and brokerage)
• When you sold (contract notes or trade confirmations)
• What you received (sale price and brokerage)
• How you calculated the gain or loss

These records must be kept for five years from the date you lodge the tax return that includes the disposal. For shares you still hold, records must be kept for the entire period of ownership plus five years after the eventual sale.

The ATO specifically warns against relying on memory or informal records. If you are audited and cannot substantiate your cost base, the ATO may assess your cost base as zero, meaning your entire sale proceeds would be treated as a capital gain.

Using TrackMyShares for tax reporting

Tracking all of this manually, especially across multiple stocks with multiple purchase lots, is where most investors run into trouble. A spreadsheet works until you have dozens of transactions across several years, and then it becomes fragile and error-prone.

TrackMyShares solves this by:

• Recording each transaction with its date, quantity, price, and fees (manually, via CSV import, or by forwarding broker confirmation emails)
• Maintaining separate tax lots for every purchase, including DRP reinvestments
• Calculating capital gains and losses automatically when you record a sale
• Classifying gains as short-term or long-term based on the actual holding period of each lot
• Generating tax reports that summarise your realised gains and losses for any financial year

You can also use the CGT calculator for quick estimates before deciding whether to sell.

For a step-by-step guide to CGT calculations, see how to calculate capital gains on shares in Australia. For a comparison of how holding period affects your tax, read short-term vs long-term capital gains in Australia.

Sign up for free and let TrackMyShares handle the tax lot tracking and CGT calculations when you sell.