How to Calculate CGT on Shares & ETFs

When you sell shares, ETF units, or managed fund units in Australia, you trigger a CGT event (specifically, CGT event A1 — disposal of an asset). The difference between what you received and what the shares cost you is your capital gain (or capital loss).

If you're new to CGT, start with our What is Capital Gains Tax? guide for the fundamentals. This guide covers everything specific to shares, ETFs, and managed funds — the situations where the general rules get complicated.

Here's what makes share CGT different from, say, selling a property:

• You often buy the same stock multiple times at different prices and dates — each purchase is a separate parcel with its own cost base and holding period
• Dividend reinvestment plans (DRP) create new parcels automatically, sometimes dozens over the years
• Corporate actions (demergers, takeovers, bonus issues) can change your cost base and the number of shares you hold without you buying or selling anything
• ETFs and managed funds can distribute capital gains to you annually — meaning you may owe CGT even though you haven't sold a single unit

The general rules still apply: your net capital gain is added to your assessable income and taxed at your marginal rate. If you held the shares for at least 12 months, the 50% CGT discount can halve your gain.

Your cost base is everything you paid to acquire and dispose of the shares. Getting this right reduces your capital gain — and your tax bill.

For shares and ETFs, the cost base typically includes:

A few things to note:

• Brokerage is split across two cost base elements. Buy brokerage is an incidental acquisition cost (Element 2). Sell brokerage is a disposal cost (Element 5). Both reduce your capital gain.
• Margin loan interest is only included in the cost base if you haven't already claimed it as a tax deduction. Most investors claim the interest annually, so it can't also go in the cost base — no double-dipping.
• Platform fees like a monthly subscription to a trading platform or a data feed aren't tied to a specific acquisition or disposal, so they don't form part of any parcel's cost base.
• For ETFs purchased through a platform like Vanguard Personal Investor or Betashares Direct, the buy/sell spread effectively functions as your transaction cost. Check whether there's a separate brokerage charge or if the spread is the only cost.

This is the single most important concept for share CGT — and the one most people get wrong.

Every time you buy shares in the same company, you create a new parcel. Each parcel has its own cost base and acquisition date. When you sell only some of your shares, you need to identify which parcels are being sold — because different parcels can produce dramatically different tax outcomes.

How Australia handles parcel matching

Unlike the US (which defaults to FIFO — first in, first out), Australia allows you to use specific identification. This means you can choose which parcels to sell, as long as you make the choice at or before the time of sale.

In practice:

• Specific identification — you pick which parcels to sell. This gives you the most control over your tax outcome.
• FIFO (first in, first out) — the oldest parcels are sold first. This is the fallback if you can't specifically identify which parcels were sold.

Why it matters: a worked example

David owns 500 CBA shares across 3 parcels. He sells 200 shares on 15 March 2026 at $130 per share ($26,000 total proceeds).

Option A — Sell the highest cost base parcels first (specific identification):

• 150 shares from Parcel 3: gain = $19,500 − $18,750 = $750. Held < 12 months → no discount. Taxable: $750
• 50 shares from Parcel 2: gain = $6,500 − $5,500 = $1,000. Held 12+ months → 50% discount. Taxable: $500
• Total taxable gain: $1,250

Option B — FIFO (sell the oldest parcels first):

• 150 shares from Parcel 1: gain = $19,500 − $14,250 = $5,250. 50% discount. Taxable: $2,625
• 50 shares from Parcel 2: gain = $6,500 − $5,500 = $1,000. 50% discount. Taxable: $500
• Total taxable gain: $3,125

By choosing Option A, David's taxable gain is $1,875 less — saving up to $844 in tax at the 45% marginal rate. Same shares sold, same proceeds, vastly different tax outcome.

Dividend Reinvestment Plans (DRPs) are popular — instead of receiving cash dividends, you receive additional shares. It feels simple. But for CGT purposes, DRPs create a paperwork headache that catches many investors off guard.

The key rule: every DRP allocation is a separate parcel

Each time your DRP allocates shares, it creates a new CGT parcel with:

• Its own acquisition date — the date the DRP shares are allocated (not the ex-dividend date or the dividend payment date)
• Its own cost base — the market value of the shares at the time of allocation, which equals the amount of dividend reinvested

If you've held a stock with DRP enabled for 10 years with semi-annual dividends, you could have 20+ separate parcels to track when you eventually sell.

Worked example

Sarah holds 1,000 BHP shares (purchased in 2020) and has DRP enabled. Over 2 years she receives 4 DRP allocations:

When Sarah sells all her BHP shares, she has 5 separate parcels to account for:

1. The original 1,000 shares (with their original purchase cost base and date)
2. 32 shares at $1,478.40 cost base (acquired 15 Sep 2023)
3. 25 shares at $1,070.00 cost base (acquired 22 Feb 2024)
4. 32 shares at $1,392.00 cost base (acquired 16 Sep 2024)
5. 23 shares at $897.00 cost base (acquired 24 Feb 2025)

Each parcel is assessed independently for the 12-month discount. If Sarah sells in August 2025, the first 3 DRP parcels qualify for the discount but the 4th doesn't (acquired Feb 2025 — less than 12 months ago).

Where to find DRP information

Your share registry (Computershare, Link Market Services, or Boardroom) sends a DRP statement with every allocation. They also provide an annual CGT summary report. Keep every statement — you'll need them when you sell. Most registries now offer online access to historical DRP data.

Companies sometimes issue additional shares or restructure their share count without you paying anything. The CGT treatment depends on where the shares come from.

Bonus shares

There are two types of bonus share issues, and the CGT rules are completely different:

From profit reserves (most common):

• No CGT event at the time of issue
• The bonus shares have a nil cost base ($0)
• The acquisition date is the date you receive the bonus shares (a new date, not your original purchase date)
• This means you need to hold them for 12 months from the bonus issue date to qualify for the CGT discount

From the company's share capital (capital returns):

• No CGT event at the time of issue
• Your original cost base is apportioned across both the original shares and the bonus shares based on their relative market values
• The acquisition date of the bonus shares is the same as your original shares — so you inherit the original holding period for CGT discount purposes

Share splits and consolidations

Share split example: You hold 100 shares with a total cost base of $1,000 ($10 each). After a 2-for-1 split, you hold 200 shares with the same total cost base of $1,000 ($5 each). No CGT event occurs — the total cost base doesn't change, it's just divided across more shares. The acquisition date stays the same.

Consolidation works the same way in reverse: 500 shares at $2 each become 100 shares at $10 each after a 1-for-5 consolidation. Total cost base unchanged.

Corporate actions are some of the most confusing CGT events for Australian shareholders. Here's how the main ones work.

Demergers

When a company splits into two separate entities (like BHP demerging its petroleum business into Woodside in 2022), you end up holding shares in both the original company and the new company — without paying anything.

If the demerger qualifies under Subdivision 125-B, no CGT event occurs at the time of the demerger. Instead, your original cost base is apportioned between the two companies based on their relative market values on the demerger date. The company will publish the apportionment percentages in its ASX announcement.

Illustrative example:

You held 500 shares in Company A with a total cost base of $20,000 (acquired June 2019). Under the demerger, you received 154 shares in NewCo. Company A advised an 85%/15% cost base split.

• Company A shares: cost base = $20,000 × 85% = $17,000 (500 shares)
• NewCo shares: cost base = $20,000 × 15% = $3,000 (154 shares)
• Both parcels retain the original acquisition date (June 2019) for CGT discount purposes

When you eventually sell either holding, you use the apportioned cost base. The demerger itself doesn't trigger any tax.

Takeovers

The CGT treatment depends on what you receive:

• Cash takeover — straightforward disposal. You're treated as selling your shares at the offer price. CGT event A1, calculated normally.
• Scrip-for-scrip (shares in the acquiring company) — if the takeover qualifies under Subdivision 124-M, you can elect to roll over the gain. Your cost base in the old shares carries across to the new shares, and CGT is deferred until you sell the new shares. Use our Scrip-for-Scrip Rollover calculator to model this.
• Mixed consideration (cash + shares) — the cash portion triggers CGT immediately. The share portion may qualify for rollover relief.

Mergers and schemes of arrangement

These are generally treated the same as takeovers. The key is whether you receive cash, scrip, or a combination. The company's scheme booklet will outline the CGT implications and any rollover relief available.

Practical tip: For any corporate action, the company (or its advisers) will publish a CGT fact sheet explaining the tax treatment for shareholders. Check the company's ASX announcements or investor relations page. This is your most reliable source for the specific apportionment percentages and whether rollover relief is available.

This catches many ETF investors off guard: you can owe capital gains tax on an ETF you haven't sold.

How it happens

ETFs and managed funds buy and sell securities internally as they rebalance, track their index, or handle investor redemptions. When the fund sells a holding at a profit, that capital gain flows through to you as a unit holder. You must include it in your tax return for the year, even though you didn't sell your ETF units.

These distributions are reported on your AMMA (Attribution Managed Investment Trust Member Annual) statement, which your fund provider sends after 30 June each year.

Key components of your AMMA statement

Your annual tax statement will break down the distribution into components. The ones relevant to CGT:

The sleeper issue: tax-deferred distributions

Tax-deferred distributions (AMIT cost base decreases) don't trigger immediate tax. Instead, they reduce the cost base of your ETF units. This means when you eventually sell, your capital gain will be larger.

Example: You buy 1,000 VAS units at $90 each ($90,000 total cost base). Each year, VAS distributes $200 in tax-deferred amounts. After 10 years, your cost base has been reduced by $2,000 to $88,000. When you sell for $120,000, your capital gain is $32,000 instead of $30,000 — an extra $1,000 in tax at the top rate after the 50% discount.

Over long holding periods with high-distribution ETFs, this effect compounds significantly.

Practical tips

• Vanguard, Betashares, and iShares all provide annual AMMA tax statements through their platforms. Use these directly in your tax return — don't try to calculate distribution components from first principles.
• Track cost base adjustments every year. When you receive your AMMA statement, update the cost base of your ETF units. Waiting until you sell to reconstruct years of adjustments is painful.
• If you use an accountant, make sure they receive your AMMA statements — many investors forget to include these because "I didn't sell anything."

Tax-loss harvesting — selling losing positions before 30 June to crystallise capital losses that offset your gains — is a legitimate and widely used strategy. But there's a line between smart tax planning and a wash sale that the ATO will challenge.

What's a wash sale?

A wash sale occurs when you sell an asset at a loss and then repurchase the same or substantially similar asset shortly afterwards, with the dominant purpose of obtaining a tax benefit. The ATO can deny the capital loss under the Part IVA general anti-avoidance provisions.

Australia has no "30-day rule"

Unlike the US (which has a specific 30-day wash sale rule), Australian tax law has no fixed safe harbour period. The ATO looks at the substance and dominant purpose of the overall transaction. Key factors they consider:

• How quickly did you repurchase?
• Did your economic position materially change?
• Was there a genuine non-tax reason for the sale and repurchase?
• Did you switch to a different investment, or repurchase the same thing?

Risk spectrum

What safe tax-loss harvesting looks like

• You hold a stock that has genuinely declined in value
• You sell it before 30 June to realise the loss
• You either don't repurchase, or you invest in a genuinely different asset (different company, different sector, different asset class)
• The loss offsets your capital gains, reducing your tax bill
• You've made a real change to your portfolio, not just a round-trip for tax purposes

How you're classified — investor or share trader — fundamentally changes how your share profits are taxed. Most people are investors, even if they trade frequently.

The difference

A share investor holds shares to earn income (dividends) and long-term capital growth. Gains are taxed under the CGT regime.

A share trader is carrying on a business of buying and selling shares with the intention of profiting from short-term price movements. Profits are taxed as ordinary business income.

How the ATO decides

The ATO considers the totality of your circumstances. There's no single test, but the key factors are:

• Volume and frequency of transactions — regular, high-volume trading suggests a business
• Intention — are you aiming for short-term profits or long-term growth?
• Business-like approach — do you have a trading plan, dedicated time, specialised software?
• Time spent — is trading your primary activity or a side activity?
• Scale of capital — is the amount of money involved consistent with a business operation?

Why it matters

For most people, investor status is significantly better — the 50% CGT discount on shares held over 12 months is extremely valuable. A share trader never gets the discount, even on shares held for years.

However, if you have large short-term losses, trader status can be advantageous because you can deduct those losses against your salary and other income, rather than waiting for future capital gains to offset them against.

The grey area

Some people have both an investment portfolio (long-term holds) and a trading portfolio (short-term speculation). The ATO accepts this — you can be an investor for some shares and a trader for others, provided you keep them clearly separated and can demonstrate the different intentions.

Let's walk through a complete, realistic example that pulls together the concepts from this guide — multiple parcels, DRP shares, the CGT discount, and a capital loss.

The scenario

James has a salary of $95,000. During FY2025–26, he made the following share transactions:

Sale 1 — CBA shares (gain): James bought 200 CBA shares on 12 January 2022 at $98.50 per share ($19,700), paying $19.95 brokerage. Over 2023–24, he received 100 additional CBA shares through DRP at an average cost of $103.50 each ($10,350 total cost base across all DRP parcels). He sells all 300 CBA shares on 15 March 2026 at $145.00 per share ($43,500), paying $19.95 sell brokerage.

Sale 2 — VAS units (loss): James bought 500 VAS (Vanguard ASX 300 ETF) units on 5 May 2025 at $92.00 per unit ($46,000), paying $9.95 brokerage. He sells all 500 on 18 November 2025 at $88.00 per unit ($44,000), paying $9.95 sell brokerage.

Step 1: CBA — Original parcel (200 shares)

Step 2: CBA — DRP parcels (100 shares)

Note: In practice, the 100 DRP shares would be multiple separate parcels (one per DRP allocation), each assessed individually. We've simplified here by grouping them, since all qualify for the discount.

Step 3: VAS — Loss

Step 4: Calculate net capital gain

The correct order is critical — apply losses before the discount:

James adds $5,695.10 to his $95,000 salary for a total taxable income of $100,695.10.

Use our CGT calculator to run your own scenario with your actual numbers.

Good records turn a stressful tax time into a straightforward exercise. Poor records mean overpaying tax (because you can't substantiate your full cost base) or getting it wrong and facing ATO scrutiny.

What to keep

• Broker contract notes (trade confirmations) — for every buy and sell. These show the trade date, number of shares, price, and brokerage. Your broker typically makes these available online for several years.
• DRP allocation statements — for every dividend reinvestment. These show the allocation date, number of shares, and DRP price. Issued by your share registry.
• Annual tax statements from ETFs and managed funds — the AMMA statement. This shows your distribution components including capital gains, tax-deferred amounts, and cost base adjustments.
• Corporate action notices — demerger cost base apportionment percentages, bonus issue details, takeover scheme booklets. Check ASX announcements and the company's investor relations page.
• Annual CGT summary from your share registry — Computershare, Link Market Services, and Boardroom all provide annual CGT reports summarising your disposals and cost bases.

How long to keep records

The ATO requires you to keep CGT records for 5 years after you lodge the tax return that includes the capital gain or loss. But for shares you still hold, you need to keep records from the date of acquisition until 5 years after eventual sale. If you bought shares in 2015 and sell them in 2030, you need records spanning 20 years.

Tools that help

• Broker CGT reports — CommSec, SelfWealth, Stake, and Interactive Brokers all generate CGT reports. These are a good starting point but may not account for corporate actions, DRP parcels, or cost base adjustments correctly.
• Share registry CGT reports — Computershare and Link provide annual CGT summaries that include DRP parcels. More reliable than broker reports for DRP-heavy holdings.
• Portfolio trackers — Sharesight and Navexa are popular Australian-focused tools that track parcels, DRP, corporate actions, and generate ATO-ready CGT reports. They import data from brokers and registries.
• Spreadsheets — perfectly adequate if you maintain them diligently. Track: date acquired, number of shares, cost base per parcel, and any corporate action adjustments.

A warning about broker CGT reports: They calculate based on the data they have — which is only the trades executed through that broker. If you transferred shares in (from another broker or from a DRP), the report won't have the correct cost base. Always verify against your own records.

Here's where to put everything when you lodge your tax return.

Where to report

Share capital gains and losses go in the Capital gains section of your individual tax return — Question 18 (Capital gains or capital losses) if you're using myTax or a paper return.

If your total capital gains for the year exceed $10,000, you must also complete the more detailed CGT schedule (a separate form), which breaks down your gains by asset type, discount status, and calculation method.

myTax pre-fill data

The ATO receives transaction data from share registries, brokers, and CHESS (the ASX settlement system). When you log into myTax, some of your share sales may already be pre-filled. ETF distributions from your AMMA statement may also appear.

Always check pre-filled data. It can be:

• Incomplete — not all brokers report to the ATO in time, and transferred shares may be missing
• Missing cost base information — the ATO often knows you sold shares but doesn't know what you paid for them
• Wrong for DRP shares — pre-fill data rarely handles DRP parcels correctly

What you report

You need to report:

• Total current year capital gains — the sum of all your capital gains before any discount
• Total current year capital losses — the sum of all your capital losses
• Net capital gain — after subtracting losses and applying the 50% discount (if eligible)
• If you have carried-forward losses from prior years, apply those too (before the discount)

ETF distributions

Capital gains distributed by your ETF appear on your AMMA statement. These should be included in your capital gains calculations. If you use myTax, the managed fund distribution data is usually pre-filled from the fund's reporting — but again, verify against your actual AMMA statement.

Timing

The CGT event occurs on the trade date. If you sold shares on 28 June 2026, the gain or loss is in your FY2025–26 return (due 31 October 2026 if self-lodging, or later if you use a registered tax agent). The settlement date (typically T+2) is irrelevant for CGT timing.

Use our CGT calculator to estimate your net capital gain before lodging — it helps you check your numbers and understand how the gain affects your total tax.