Capital gains on shares sold in Australia
Every time you sell shares in Australia, you trigger a CGT event. The ATO calls it "CGT event A1", and it happens on the trade date (the day your sell order executes), not the settlement date two business days later.
This catches people out near 30 June. Sell on 29 June 2026 and the gain belongs to the 2025-26 financial year, even though settlement lands in July.
Calculating the gain or loss
The maths is simple:
Capital gain = Capital proceeds - Cost base
- Capital proceeds: Sale price multiplied by quantity, minus brokerage
- Cost base: Purchase price multiplied by quantity, plus brokerage
If the number is negative, you have a capital loss. For a full walkthrough including the 50% CGT discount, see our guide on how to calculate capital gains on shares in Australia.
Partial sales and lot selection
This is where things get interesting, and where most investors leave money on the table.
When you sell only some of your shares in a company, the ATO lets you choose which specific parcels you are disposing of. There is no mandatory first-in-first-out rule. You pick the lots that give you the best tax outcome.
That choice affects two things: whether the shares qualify for the 50% CGT discount (based on each parcel's holding period), and the size of the gain (based on each parcel's cost base).
Worked example
David bought CBA shares in three separate transactions:
| Parcel | Date purchased | Shares | Price per share | Brokerage | Cost base |
|---|---|---|---|---|---|
| Lot 1 | 10 Jan 2024 | 200 | $100.00 | $9.95 | $20,009.95 |
| Lot 2 | 15 Jul 2024 | 150 | $115.00 | $9.95 | $17,259.95 |
| Lot 3 | 20 Mar 2025 | 100 | $130.00 | $9.95 | $13,009.95 |
On 15 March 2026, David sells 250 shares at $140.00, paying $19.95 in brokerage. Net proceeds: $34,980.05.
Option A: Sell Lot 1 (200) + 50 from Lot 2
- Total cost base: $20,009.95 + (50/150 x $17,259.95) = $25,763.27
- Capital gain: $9,216.78
- All held over 12 months, so the 50% discount applies
- Discounted gain: $4,608.39
Option B: Sell Lot 3 (100) + Lot 2 (150)
- Total cost base: $13,009.95 + $17,259.95 = $30,269.90
- Capital gain: $4,710.15
- Lot 2 qualifies for the discount (held over 12 months). Lot 3 does not (held less than 12 months).
- After splitting and applying the discount: $2,846.11 assessable
Option B produces a lower tax bill despite partially losing the CGT discount, because the newer parcels have a higher cost base. This is exactly why tracking individual lots matters.
TrackMyShares supports specific lot selection when recording a sale, so you can compare the tax impact of different options before confirming.
DRP shares are individual parcels
If you participate in a dividend reinvestment plan, each quarterly reinvestment creates a new parcel with its own acquisition date and cost base. Three years in a DRP means 12 separate parcels, each requiring its own CGT calculation when you sell.
This is the kind of record-keeping that breaks spreadsheets. The amounts are small and easy to lose track of, but the ATO expects you to get every one right.
Record-keeping requirements
The ATO requires records showing when you acquired shares, what you paid, when you sold, what you received, and how you calculated the gain or loss. Keep these for five years after you lodge the return that includes the disposal. For shares you still hold, keep records for the entire holding period plus five years after selling.
If you get audited and cannot substantiate your cost base, the ATO may assess it as zero. Your entire sale proceeds become a capital gain.
Tracking this with TrackMyShares
TrackMyShares records each transaction with its date, quantity, price, and fees (manually, via CSV import, or by forwarding broker confirmation emails). It maintains separate tax lots for every purchase including DRP reinvestments, calculates gains and losses automatically, classifies them as short-term or long-term, and generates tax reports summarising your realised gains for any financial year.
You can also use the CGT calculator for quick estimates before deciding whether to sell. For more on how holding period affects 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.
This is general information, not personal tax or financial advice.