TrackMyShares

How to calculate capital gains on shares in Australia

TrackMyShares Team

Sell shares for more than you paid, and the ATO wants a slice. That gain gets added to your assessable income and taxed at your marginal rate. The good news is the calculation itself is straightforward once you understand cost base and the 50% CGT discount.

The basic formula

Capital gain = Capital proceeds - Cost base

Capital proceeds are what you received from the sale, minus selling costs like brokerage.

Cost base is everything you paid to acquire the shares. For most investors, that means the purchase price plus brokerage on the buy side. The ATO technically defines five elements of cost base, but for listed shares, it almost always comes down to purchase price plus brokerage. Keep it simple, but keep it accurate.

Worked example

Sarah buys 500 Wesfarmers (WES) shares at $52.00, paying $9.95 brokerage.

  • Purchase cost: 500 x $52.00 = $26,000.00
  • Buy brokerage: $9.95
  • Total cost base: $26,009.95

Fourteen months later, she sells all 500 at $61.00, paying $9.95 brokerage.

  • Sale proceeds: 500 x $61.00 = $30,500.00
  • Sell brokerage: $9.95
  • Net capital proceeds: $30,490.05

Capital gain before discount: $30,490.05 - $26,009.95 = $4,480.10

She held for more than 12 months, so the 50% CGT discount applies.

Discounted capital gain: $4,480.10 x 50% = $2,240.05

That $2,240.05 is added to Sarah's assessable income for the 2025-26 financial year.

The 50% CGT discount

This is one of the biggest tax benefits for Australian individual investors. Hold shares for at least 12 months and one day, and you only include half the gain in your assessable income.

The key rules, as of early 2026:

  • Applies to individuals and trusts (trusts receive 50% for individual beneficiaries)
  • SMSFs get a reduced discount of 33.33%
  • Companies get no discount at all
  • The 12-month clock starts from the trade date, not the settlement date
  • You must hold for more than 12 months, not exactly 12 months

The discount applies after offsetting capital losses. So a $10,000 gain minus a $3,000 loss gives $7,000, then the 50% discount brings it to $3,500.

Capital losses

Sell below your cost base and you have a capital loss. Capital losses can only offset capital gains. You cannot deduct them from salary or other income.

The rules are strict:

  • Offset losses against gains in the same financial year first
  • Carry forward remaining losses indefinitely to future years
  • Apply losses before the CGT discount
  • You cannot "save" a loss for later if you have gains this year

Example with a loss: James sells BHP for a $6,000 gain (held 15 months) and Zip Co for a $2,500 loss in the same FY.

First, offset: $6,000 - $2,500 = $3,500. Then the 50% discount: $3,500 x 50% = $1,750. James adds $1,750 to his assessable income.

CGT events beyond simple sales

Most share trading is CGT event A1, a straightforward disposal. But corporate actions like takeovers, demergers, share buybacks, and return of capital payments also trigger CGT events. Return of capital payments reduce your cost base rather than counting as income. If you encounter a corporate action, the company usually provides a tax guide explaining the treatment.

Automate the calculation

Manually tracking cost bases across multiple trades and financial years gets messy fast, especially with DRP shares where each reinvestment creates a separate lot with its own cost base and acquisition date.

If you want to check a quick number, the TrackMyShares CGT calculator lets you enter purchase details, sale details, and holding period to see the gain including any discount.

For ongoing tracking, a transaction-based portfolio in TrackMyShares calculates your cost base and gains as you record trades. When you sell, you can choose specific lots rather than defaulting to FIFO, giving you control over which parcels are sold and whether the CGT discount applies. You can import transactions from your broker's CSV, with dedicated guides for CommSec, SelfWealth, Stake, and Superhero.

TrackMyShares generates tax reports that break down realised gains and losses by financial year, classify them as short-term or long-term, and calculate the discount automatically. No spreadsheets.

For a broader overview of portfolio tracking, see our guide on how to track your shares in Australia. Sign up for free and let TrackMyShares handle the CGT calculations for you.

This is general information, not personal tax or financial advice.