Confirm that the sale is a personal CGT event
This guide is for an Australian tax resident holding shares as a personal investment outside superannuation. Super funds, companies, trusts, non-residents, employee share schemes, and people carrying on a share-trading business can have different rates and calculation methods.
Australia does not charge a separate flat CGT. A net capital gain is included in assessable income for the financial year from 1 July to 30 June and taxed through the individual income-tax system.
Calculate proceeds minus the correct cost base
For a standard sale, subtract the cost base from capital proceeds. The cost base can include purchase price, brokerage and other incidental acquisition or disposal costs, while special rules may apply to gifts, inheritances, employee shares, demergers, takeovers, returns of capital, and non-arm's-length transactions.
A capital loss uses the reduced cost base, which is not always identical to the cost base used for a gain. Keep the components separately rather than storing only one unexplained average price.
Identify the parcels that were actually disposed of
Each share is a CGT asset, and investors who bought the same company in several parcels need records supporting which shares were sold. Parcel choice affects cost base, holding period, and access to the CGT discount; a broker's portfolio average alone may not support the calculation.
Record acquisition date, quantity, price, brokerage, corporate actions, disposal date, and disposal costs for each parcel. The ledger should preserve the remaining quantity and cost after a partial sale.
Deduct capital losses before applying any discount
Current-year capital losses and unapplied net capital losses from earlier years are deducted from capital gains before the CGT discount is applied. Capital losses generally cannot reduce salary or other ordinary income.
If losses exceed gains, the remaining net capital loss can generally be carried forward for use against future capital gains, subject to the applicable rules. Choosing which gains absorb losses can affect the benefit of the discount.
Check the 12-month 50% CGT discount
Australian resident individuals can generally reduce an eligible capital gain by 50% when they owned the asset for at least 12 months. Shares bought and sold within 12 months use the other method and do not receive the discount.
The timing test and discount can be affected by options, corporate actions, and periods of foreign residence. Companies do not receive the individual 50% discount, so the account owner and entity type are required inputs.
Apply marginal income tax after the CGT calculation
After losses and any discount, the net capital gain is added to assessable income. Estimated tax depends on other income, deductions, residency, the applicable income-tax brackets, and amounts such as the Medicare levy rather than a standalone CGT percentage.
A pre-sale screen should show the net capital gain separately from estimated tax. That lets the user change the assumed marginal rate without rewriting the parcel and loss calculations.
Worked example: losses first, discount second
Assume capital proceeds of A$20,000 and a cost base of A$12,100 including acquisition and disposal costs. The capital gain is A$7,900. Deducting A$1,900 of available capital losses leaves A$6,000; if the parcel qualifies for the 50% discount, the net capital gain included in assessable income is A$3,000.
At an illustrative 30% marginal rate, estimated income tax attributable to the gain is A$900, before any Medicare levy effect. If A$100 of the cost base was a selling fee, sale cash after that fee and estimated tax is A$19,000.
What the Portle estimate should ask and show
Inputs should include tax residence, owner type, investment or trading treatment, financial year, parcel dates and quantities, proceeds, cost-base components, currencies, current-year gains and losses, carried-forward losses, and estimated taxable income. Results should show parcel gain, losses applied, discount eligibility, discount amount, net capital gain, assumed marginal rate, estimated tax, and after-tax sale cash.
Official references: ATO Guide to capital gains tax and Personal investors guide to capital gains tax (ato.gov.au), including the share-sale and CGT-discount sections. This is an educational estimate, not tax advice or a substitute for records and a completed tax return.