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Note: This report is only available in Australian tax residency portfolios

The Capital Gains Tax (CGT) Report in Sharesight calculates capital gains made on shares as per Australian Tax Office rules. The report may be run over any date range.

The report is based on the 'discount method' for shares that were held for more than 1 year and the 'other method' for shares held for less than one year. The discount rate used can be set within the Tax setting (the default rate is 50%). Information on the 'discount method' and 'other' method on the ATO website.

For more detail about Australian Capital Gains tax rules, please refer to the ATO website.

Jump to:

• Report overview
• Running the CGT Report
• Editing sale allocation methods
• Foreign exchange rates and CGT
• Xero users

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Report Overview

Note: Quantities and cost bases are adjusted by Sharesight to allow for any capital returns and capital reconstructions.

Short Term Capital Gains

This table lists capital gains that have been made during the selected period on shares held for less than 12 months.

Non Discounted Capital Gains Distribution

Capital gains distributions passed on from ETFs held for less than 12 months. These are gains generated by rebalancing activity within the fund — see why ETFs can show capital gains even if you haven't sold any shares.

Discounted Capital Gains Distribution

Capital gains distributions passed on from ETFs held for more than 12 months, eligible for the CGT discount. These arise from rebalancing within the fund — see why ETFs can show capital gains even if you haven't sold any shares.

Long Term Capital Gains

This table lists any capital gains during the selected period on shares held for more than 12 months.

Shares purchased prior to 20 September 1985 are not subject to CGT and therefore are excluded from the report.

Capital Losses

This table lists any capital losses during the period.

CGT Summary

The summary shows your net taxable capital gain for the period. Here is how Sharesight calculates it:

	Short-term (held < 12 months)	Long-term (held ≥ 12 months)
Capital gains	Taxed in full	Eligible for CGT discount
Capital losses	Offset short-term gains first	Remaining losses offset long-term gains

Step 1 — Adjust cost base

If any shares received a return of capital or capital reconstruction during the period, the cost base of those shares is adjusted first.

Note: Returns of capital give rise to a capital gain where the amount returned exceeds the cost base of the share, or where the shares are sold before the return of capital is received. In either case, an 'unallocated capital return' is added to the appropriate gain bucket. Please see ATO example

Step 2 — Offset capital losses

Any capital losses are applied against short-term gains (held < 12 months) first. If losses exceed short-term gains, the remainder is applied against long-term gains (held ≥ 12 months).

Step 3 — Apply the CGT discount

Long-term gains remaining after losses are discounted by your applicable rate (default 50% for Australian individuals). You can adjust this in Tax settings.

Step 4 — Sum the result

Short-term gains (after losses) + discounted long-term gains = your net taxable capital gain for the period.

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Running the Capital Gains Tax Report

1 – From any page click on the Tax tab.

2 – Click the Capital Gains Tax Report tile.

3 – From the dropdown calendar, select the date range you would like to run the report in.

4 – If you have any carry forward losses from the previous reporting period, click Advanced Options.

Note: Sharesight does not automatically account for any capital losses in previous tax years. Capital losses to be carried forward must be accounted for manually. The carry forward amount is not saved and must be re-entered if you rerun the report.

5 – Type in the amount of the loss into the Losses carried forward field.

6 – Click Apply.

7 - The sale allocation method may be changed, default is First In, First Out. To change; click on Change sale allocation method.

8 – From the dropdown list, select the sale allocation method, this can be chosen at the portfolio level or specified individually against each holding. You can experiment with different sale allocation methods in order to optimise your CGT position.

Sale allocation methods available:

• First In, First Out (default method) – Sharesight assumes that you sell your longest held shares first.

• Last In, First Out – Sharesight assumes that you sell your most recently purchased shares first.

• Minimise Capital Gain – Sharesight assumes that you sell shares with the highest purchase price first.

• Maximise Capital Gain – Sharesight assumes that you sell shares with the lowest purchase price first.

• Minimise Capital Gain tax - Takes discounting rules into consideration to minimise your taxable gain.

The ATO website provides important information on the sale allocation method. For a full explanation of each method, how parcel tracking works, and how lock-in preserves your CGT positions across financial years, see Sale Allocation Method.

9 - Click Update current report.

10 - Once the sale allocations are correctly set, click the Lock between [Date of Report] button at the bottom of the report to save the sale allocations for the period.

Using the lock feature allows you to permanently save the sale allocations setting for the selected reporting period, which means when you alter the sale allocation methods in the next reporting period, it will not invalidate the CGT result for a previous period.

11 - Click Lock button.

A locked report is indicated by a lock icon at the top of the report and by the holdings.

Note: CGT positions must be locked in chronological order. Make sure that you have locked the positions for the previous reporting period before you alter the sale allocations for the current period.

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Editing the sale allocation methods within a locked reporting period

A locked reporting period transactions and sale allocating methods can be edited. It is not recommended to alter information in a Sharesight CGT report that was prepared for a previous tax return.

A warning message is displayed when attempting to edit data relating to a locked reporting period.

To alter the sale allocation methods used for a previous locked period, click the current lock date 'Sale allocation methods' link that is displayed at the top of the report to reveal a list of locked reporting periods.

If you wish to unlock multiple reporting periods you must do so in reverse chronological order.

WARNING: Altering the sale allocation method for a previous reporting period will alter the CGT result for the period that is being edited and any subsequent reporting periods.

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Foreign exchange rates and CGT

For holdings traded in a foreign currency, Sharesight converts the purchase and sale prices to AUD to calculate your capital gain or loss. The exchange rate used matters — different rates will produce different CGT figures.

Which exchange rate does Sharesight use?

Sharesight applies rates in this order of priority:

1. Broker-provided rate — if your broker supplies an exchange rate via API integration or trade confirmation email, Sharesight uses that rate for the trade.
2. Open Exchange Rates — if no broker rate is available, Sharesight uses end-of-day market rates from Open Exchange Rates, its FX data provider.

What rate can I use for ATO tax reporting?

The ATO does not mandate a single exchange rate. For CGT purposes on foreign share transactions, you may use:

• Spot rate — the actual rate at the time you converted funds (e.g. when you transferred AUD to USD to fund the purchase)
• Sharesight's rate — the end-of-day rate from Open Exchange Rates
• ATO / RBA monthly rate — published at ato.gov.au/Rates/Foreign-exchange-rates/

Is the ATO/RBA rate mandatory?

No. The ATO publishes monthly RBA rates as a convenience, but does not require their use. The ATO states that you may use an alternative rate if:

"it is a reasonable approximation of the exchange rates that would otherwise be applicable...you can use appropriate exchange rates provided by another reliable external source."

Open Exchange Rates collects data from multiple public-facing APIs. Sharesight considers this to satisfy the ATO's criteria of a "reliable external source" providing a "reasonable approximation."

It is also worth noting that there is no single "true" exchange rate — rates change constantly, meaning even the RBA's monthly average is itself an approximation of the rates that applied on any given day. The key is using a credible, consistent source.

What if I want to use a different rate?

You can manually override the exchange rate on any buy or sell trade. Edit the trade and enter your preferred rate in the Exchange Rate field — Sharesight will recalculate the CGT figures accordingly.

Note: This is general information only and not tax or financial advice. If you are unsure which exchange rate to use for your tax return, consult a registered tax agent or accountant.

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An important note for Xero users

The specified sale allocation method is used when calculating the realised gain component and cost base reduction on sell trades that are synchronised to Xero.

If the sale allocation method is altered within the CGT report after you have synchronised sell trades to Xero, you will be presented with an option to resynchronise any transactions that have altered line item amounts.

Note: The total invoice value will not change, but the split between capital gain and the reduction of the asset cost base may be different.

Additional Resources, watch the using Sharesight to complete your tax return webinar recorded 24 June 2020. Learn how to use Sharesight to make completing your tax return quicker, easier and more accurate by Ben Clendon, Sharesight Product Manager.