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Australian investment tax, explained
Most investing mistakes teach you something. Tax mistakes don't. You make them in March and find out in October, when the return is lodged and the sale cannot be undone.
Sell a parcel two days early and the tax on that gain doubles. A dividend reinvestment quietly creates a new parcel with its own cost base. A capital loss applied to the wrong gain wastes the discount entirely.
None of these announce themselves. Your portfolio shows a number and nothing tells you the rule behind it. These pages explain it. Each is written against the ATO and carries its source and the date it was last checked.
10 lessons, free and open to read.
How gains are taxed
What counts as a CGT event
Tax is triggered by a CGT event, not by money arriving. Selling is the obvious one. Gifting, swapping and settling a contract also count, and the date is often not the date you were paid.
How capital gains tax is calculated on shares
There is no capital gains tax rate. The gain is added to your income and taxed at your marginal rate, after losses and any discount are applied, in that order.
The 50% CGT discount, and the 12-month rule
Hold an asset for at least 12 months and half the capital gain is taxed instead of all of it. The counting is stricter than most people assume.
FIFO, LIFO and min-gains: which parcels you are actually selling
If you can identify which parcel you sold, the ATO accepts your choice. If you cannot, you are required to use first-in first-out. The difference is records, and it can be thousands of dollars.
Capital losses: what they can offset, and what they cannot
A capital loss reduces capital gains and nothing else. It cannot touch your salary. Unused losses carry forward, and which gain you spend them on changes what you pay.
What changes on 1 July 2027, when the 50% CGT discount ends
The 50% discount is replaced by cost base indexation and a 30% minimum tax rate. It is already law. Gains accruing before the changeover keep the old treatment, which makes purchase records matter more, not less.
Reading a chart
What a price chart can and cannot tell you
Every candle is four numbers. Before the patterns, it is worth being clear about what those numbers contain and what gets added by the person reading them.
What a double bottom is, and what it is not
Two lows at a similar level with a rebound between them. The shape is easy to name afterwards and hard to call at the time, which is the whole problem with it.
Head and shoulders, and why three peaks get a name
Three peaks with the middle one highest, sitting on a neckline drawn under the two troughs. The most cited reversal pattern there is, and the one most often seen where it is not.
Fair value gaps, and the claim attached to them
Three candles where the first and third do not overlap, leaving a band of price that never traded. What the band is, and who says price comes back to it.
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