You can minimise the CGT you pay by:
- Holding onto an asset for more than 12 months if you are an individual.
- Offsetting your capital gain with capital losses.
- Revaluing a residential property before you rent it out.
- Taking advantage of small business CGT concessions.
- Increasing your asset cost base.
Are shares subject to Capital Gains Tax?
You may have to pay Capital Gains Tax if you make a profit (‘gain’) when you sell (or ‘dispose of’) shares or other investments. Shares and investments you may need to pay tax on include: shares that are not in an ISA or PEP.
How are capital gains calculated when you sell shares?
Your capital gain to be taxed is based on your sale price less your adjusted cost base for the shares sold. To use an example, if you’ve purchased 10 shares for $10 ($100) and 10 shares for $20 ($200), you own 20 shares with an ACB of $300. If you sell half – 10 shares – you still own 10 shares with an ACB of $150.
How much of a capital gain can I report on my tax return?
If you sell all 20 shares for $500, you have a $50 capital gain to report on your tax return. Clear as mud? To use another example, if you’ve purchased 10 shares for $10 ($100) and 10 shares for $20 ($200), and your employer matches your purchases 100%, you own 40 shares with an ACB of $600.
When do you get a short term capital gain?
Short Term Capital Gain on Shares Gains generated from shares held for a period shorter than 36 months (for unlisted equity shares) or 12 months (for listed equity shares) are considered for short term capital gain on shares.
How much does it cost to sell 10 shares of stock?
If you sell half – 10 shares – you still own 10 shares with an ACB of $150. If you buy 10 more shares for $30 ($300), you own 20 shares with an ACB of $450. If you sell all 20 shares for $500, you have a $50 capital gain to report on your tax return.
