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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 do — written against the ATO, each carrying its source and the date it was last checked.
6 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.
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