Capital gains tax on shares in Australia: a complete guide

A plain-English walkthrough of how capital gains tax works on shares in Australia. Covers the 50% discount rule, your cost base, how to calculate a gain or loss, and what to put on your tax return. Based on ATO guidance current as of 2026.

What CGT is and when it applies
How to calculate a capital gain or loss
The 50% CGT discount rule explained
Worked examples with numbers
How to report CGT to the ATO

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Everything you need

What CGT is

CGT is not a separate tax. A capital gain on shares is added to your other income for the year and taxed at your marginal rate. A capital loss can offset current or future capital gains.

Cost base

Your cost base is generally the price you paid plus brokerage, stamp duty where applicable, and other costs of acquisition. AMMA statements can also adjust the cost base for ETF investors.

12-month rule

Shares held for more than 12 months before sale qualify for the 50% CGT discount for individuals and trusts, which halves the taxable gain. The clock starts the day after you acquire the shares.

What to report

Report net capital gains under the capital gains section of your tax return (Item 18 for individuals). Losses carry forward if you have no current-year gains to offset.

How it works

Work out your capital proceeds

Capital proceeds are the sale price of the shares, less any selling costs such as brokerage. This is the amount you actually received from the sale.

Subtract your cost base

Take the cost base (purchase price plus acquisition costs) away from the capital proceeds. A positive result is a capital gain. A negative result is a capital loss.

Apply the 50% discount if eligible

If you held the shares for more than 12 months, an individual or trust halves the net gain after offsetting losses. Companies and self-managed super funds use different rules.

Worked example: CGT on an ASX share sale

You bought 100 shares at AUD 20 each on 1 July 2023, paying AUD 15 brokerage. Your cost base is AUD 2,015.
You sold all 100 shares on 1 September 2024 at AUD 30 each, paying AUD 15 brokerage. Your capital proceeds are AUD 2,985.
Gross capital gain: AUD 2,985 minus AUD 2,015 = AUD 970.
You held the shares for more than 12 months, so you can apply the 50% CGT discount. Taxable capital gain: AUD 485.
That AUD 485 is added to your other income for the year and taxed at your marginal rate.
If your marginal rate is 32.5%, the tax on this sale is about AUD 158. A calculator like the TrackMyShares CGT calculator handles this automatically.

Frequently asked questions

Do I have to pay CGT if I sell at a loss?: No. A capital loss does not trigger a tax bill. It can be used to offset other capital gains in the same financial year. If you have no gains to offset, the loss carries forward and can offset future capital gains indefinitely. A capital loss cannot be used to reduce your salary or other ordinary income.
When does the 12-month period start for the CGT discount?: The discount applies when you have held the shares for more than 12 months before the sale. The holding period runs from the day after contract date of the purchase to the day before contract date of the sale. Trade date (contract date) matters, not settlement date.
Do brokerage and fees count in my cost base?: Yes. Brokerage paid on purchase is part of your cost base. Brokerage paid on sale reduces your capital proceeds. Other acquisition costs such as stamp duty (where applicable) also count. Keep records of every transaction, including fees.
What about ETFs and AMMA statements?: For ETFs and managed funds, the AMMA (or AMIT) statement you receive each year can adjust your cost base up or down based on the fund's tax components. These adjustments must be applied to get the correct capital gain or loss when you eventually sell.
Do I pay CGT on dividends?: No. Dividends are taxed as ordinary income in the year you receive them, not as capital gains. Franking credits attached to fully franked dividends reduce your tax or can be refunded. CGT only applies when you sell the shares.
Where do I report capital gains on my tax return?: Individuals report capital gains at Item 18 on the tax return. You include your total current-year capital gains, prior-year losses used, and the net capital gain. MyTax walks you through this step by step. Keep records of each sale for five years after you lodge.
What if I inherit shares or receive them as a gift?: Inherited shares are generally taken to be acquired on the date of death, using the market value at that date as the cost base, although different rules apply if the deceased acquired the shares before 20 September 1985. Gifted shares are treated as if you paid the market value at the time of the gift. The ATO has specific guidance for these cases, and professional advice is a good idea.
Is this tax advice?: No. This page is general information only, based on ATO guidance current at the time of writing. Your personal situation may differ. Speak with a registered tax agent or financial adviser before acting on any of this. See the ATO website at ato.gov.au for the official source.

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