The cost base is wider than the purchase price

A capital gain usually begins with capital proceeds minus the asset’s cost base. The purchase amount is only the first element. Eligible incidental acquisition and disposal costs, certain ownership costs, capital expenditure that increases or preserves value, and costs of establishing or defending title can also be relevant. Missing an eligible element overstates the gain; including a cost already deducted from ordinary income can understate it.

For shares, common incidental amounts include brokerage on purchase and sale. For property, stamp duty, conveyancing, agent commission and qualifying capital improvements may enter the calculation. Repairs, interest, rates and insurance need careful treatment because deductibility, acquisition date and asset use affect whether they belong in the cost base. The fields above are categories, not a decision that every entered receipt qualifies.

Reduce the base when prior tax treatment requires it

Some amounts reduce the cost base. Rental property capital works deductions are a familiar example; non-assessable payments from a company or managed fund can also alter the base of shares or units. The reduction field exists so a known adjustment is not forgotten. It should not be used as a generic depreciation estimate. Trace the adjustment to tax records and keep the calculation with the acquisition and sale documents.

Market value can replace cash proceeds or purchase cost

Giving an asset away, transferring it for less than market value or receiving non-cash consideration can trigger market-value rules. Related-party transfers are especially likely to need evidence. A zero-dollar sale price does not automatically mean a zero capital gain. Obtain a defensible valuation for the relevant time rather than entering the nominal contract amount merely because money did not change hands.

Capital losses come before the CGT discount

The order in the waterfall matters. First calculate capital gains for the year’s CGT events. Apply current-year capital losses and unapplied prior-year net capital losses to capital gains. Only after those losses have reduced the eligible gain is the CGT discount applied. Halving the gain first and subtracting losses later can produce the wrong net capital gain.

Individuals and Australian trusts can generally use a 50% discount for an eligible asset held for at least 12 months. Complying super funds generally reduce an eligible gain by 33⅓%. Companies cannot use the standard CGT discount. The page sets the percentage from the owner type and switches it off when “held at least 12 months” is set to no.

Example: an individual sells after more than 12 months

Using the default inputs, the $100,000 purchase amount plus $2,000 acquisition costs, $5,000 selling costs and $10,000 improvements produces a $117,000 cost base. Proceeds of $180,000 create an initial $63,000 gain. After $5,000 of capital losses, $58,000 remains. A 50% individual discount makes the net capital gain $29,000. At an illustrative 37% marginal rate, the simple additional income-tax effect is $10,730.

A short holding period changes the whole remaining gain

If the same asset was held for less than 12 months, the standard discount is unavailable. After the $5,000 loss, the full $58,000 would remain as the net capital gain under this simplified method. The tax effect at 37% would then be $21,460. This comparison shows why acquisition and disposal dates must be recorded precisely rather than rounded to “about a year”.

CGT is part of income tax, not a separate flat charge

The net capital gain is included in assessable income. An individual’s actual tax increase depends on the rest of their taxable income, progressive tax brackets, Medicare levy and other interactions. The optional rate field multiplies the net capital gain by one rate to create a planning estimate. It is most useful when the gain sits mainly inside one known marginal bracket; it becomes less reliable when the gain crosses several brackets.

A trust commonly calculates a net capital gain and distributes components to beneficiaries, whose tax outcomes depend on trust law and tax rules. A complying super fund has its own tax rate and discount. A company has no standard CGT discount, but its tax rate and treatment of capital losses still need company-level calculation. Selecting an owner type here chooses only the standard discount percentage; it does not reproduce an entity tax return.

The cash result is not sale profit

The “proceeds after sale costs and illustrated tax” figure subtracts disposal incidental costs and the estimated tax effect from gross proceeds. It does not subtract the purchase price, loan repayment, acquisition costs paid years earlier or amounts withheld at settlement. Use it as a narrow settlement-planning figure, not as the investment’s lifetime profit or cash available after discharging finance.

Exemptions and alternative methods can replace this calculation

A main residence may be fully exempt, partly exempt or affected by income-producing use, absence rules, more than two hectares, a deceased estate or a change in residency. The page does not calculate those fractions. Investment property also requires cost-base adjustments for capital works and may have separate balancing adjustments for depreciating assets. Use a property-specific worksheet before relying on the general fields.

Assets acquired before 20 September 1985 are generally pre-CGT, subject to exceptions. Assets acquired before 11:45 am on 21 September 1999 may qualify for the indexation method, which can be compared with the discount method. Small business CGT concessions can further reduce or defer qualifying gains. Foreign-residency periods can limit an individual’s discount, and affordable rental housing can produce an additional discount for eligible Australian resident individuals. None is inferred here.

Crypto, collectables and personal-use assets retain transaction detail

Each disposal, swap, gift or use event can matter for crypto assets. Collectables and personal-use assets have special thresholds and loss restrictions. Managed fund statements may include discounted and non-discounted gains plus cost-base adjustments. A single annual proceeds number is not enough when different parcels, methods and loss categories apply. Calculate each event correctly before entering a combined gain or allocated losses.

Records should connect acquisition, ownership changes, improvements, deductible expenses, non-assessable payments and disposal. The ATO can require records long after the purchase date because the CGT event happens on sale. Store contracts, invoices, settlement statements and calculations in a form that survives a change of accountant, broker or property manager.