Short answer
In Australia, selling shares triggers a Capital Gains Tax (CGT) event — you report the gain or loss in your tax return for the financial year the sale settled. The ATO (ATO guidelines) has share-trade data direct from CHESS and major brokers (CommSec, SelfWealth, Stake, Pearler, NAB Trade, etc.), so all trades will be pre-filled in your myTax return.
But pre-fill ≠ correct cost base. You need to track your own purchase records to get the right tax outcome.
How Capital Gains Tax on shares works
```
Capital Gain (or Loss) = Sale Proceeds - Cost Base
```
- Sale Proceeds = what you sold for, less brokerage on the sale
- Cost Base = what you paid, plus brokerage on the purchase, plus any incidental costs
If you held the shares for >12 months before selling, Australian tax residents get a 50% CGT discount — only half of the gain is taxable.
Simple example
- Bought 100 BHP @ $45 = $4,500 + $15 brokerage = cost base $4,515
- Sold 14 months later @ $52 = $5,200 - $15 brokerage = proceeds $5,185
- Capital Gain = $5,185 - $4,515 = $670
- Held > 12 months: 50% discount applies → $335 added to taxable income
- Tax payable at your marginal rate (e.g. 30%) = $100.50
Important: parcels and the order you "sell" them
If you bought BHP in three lots:
- 50 @ $40 (Jan 2024)
- 50 @ $45 (Jul 2024)
- 100 @ $50 (Mar 2025)
And in May 2026 you sold 80 BHP shares — which parcel did you sell?
You can choose, but you should be consistent and document it. Two common methods:
| Method | How it works |
|---|---|
| First-In-First-Out (FIFO) | Sell oldest parcel first; longest CGT discount benefit |
| Specific identification | Pick the parcel that gives best tax outcome (e.g. highest cost base = smallest gain) |
The ATO accepts either — but you need records showing which parcel you assigned to the sale.
Capital losses
If you sold at a loss, you have a capital loss that:
- Can offset capital gains in the same year first
- Then carries forward indefinitely to offset future capital gains
- Cannot offset ordinary income (e.g. wages)
So if you sold ABC at $2,000 loss and XYZ at $3,000 gain in the same year → net gain $1,000 → if held > 12 months, half ($500) added to taxable income.
If you have only losses this year → $0 added to income, but your net capital loss carries forward to next year. Track this on your return — myTax has a field for it.
Dividends and franking credits
Owning shares ≠ just CGT. Dividends are also taxable:
- Dividends received during the year are ordinary income — included at the date of receipt
- Franking credits (the tax already paid by the company) attached to fully franked dividends can be claimed as a tax credit, effectively making the dividend tax-free for low-rate earners
Example: $700 fully franked dividend
- Cash received: $700
- Franking credit: $300 (the 30% company tax already paid)
- "Gross-up" to taxable income: $700 + $300 = $1,000
- You include $1,000 in your taxable income
- And claim $300 as a tax credit
- Net effect: dividend taxed at your marginal rate minus the 30% already paid
CommSec / Sharesight / your broker will give you a tax-friendly summary of all dividends + franking credits — use it.
Records to keep
- Buy and sell contract notes for every trade (5 years from sale year)
- Dividend statements (especially DRP — dividend reinvestment plan — which creates additional small parcels with their own cost base)
- Capital loss carry-forward documentation if you had losses
When you should use a Tax Agent
Single-portfolio CGT is fairly DIY-able if you only had a few trades. Get a Tax Agent if:
- You sold > 10 parcels in the year (FIFO calc + 50% discount eligibility gets complex)
- You did Dividend Reinvestment Plan (DRP) — each reinvestment creates a new mini-parcel
- You held shares in foreign brokerage (US, HK) — worldwide income reporting + foreign tax credits
- You participated in IPOs, share buybacks, or rights issues — cost-base impact varies
- You had ESS (Employee Share Scheme) shares — separate tax-time rules
- Significant capital losses to carry forward (worth getting the documentation right)
Need a professional? Browse every TPB-registered tax agent near you in the AusTax directory, or post a request and matching practices will contact you — free.
See crypto/shares decision guide for the broader investment-tax framework.
Need Help With Your Tax Return?
Sold shares this year? a registered tax agent (see the directory)
*Disclaimer: This is general information only and does not constitute personal tax advice. Consult a registered tax agent for advice tailored to your specific situation. Always verify against the latest ATO guidelines at ato.gov.au.*
This is general information only. Share tax outcomes depend heavily on your specific circumstances and parcel records — confirm with a TPB Registered Tax Agent for material amounts.