Capital Gains Tax Report

Content also available for Canadian tax entities or on our global site.
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.

Running the Capital Gains Tax Report:

1 – From any page click on the ‘Report’ tab.

1 - Diversity Report

2 – Click the ‘Capital Gains Tax Report’ tile.

2 - CGT report tile

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

3 - CGT report

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.

4 - CGT report

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

6 – Click ‘Apply’.

4 & 5 - CGT report

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

7 - CGT report

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 - Takes discounting rules into consideration to minimise your taxable gain

The ATO website provides important information on the sale allocation method.

9 - Click ‘Update current report’.

8 & 9 - CGT 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.

10 - CGT report

11 - Click ‘Lock’ button.

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

sale allocation method

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.

11 - CGT report

Report Overview

CGT report

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

12 - 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.

12 - CGT report

13 - 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.

13 - CGT report

14 - Capital Losses This table lists any capital losses during the period.

14 - CGT report

15 - CGT Summary The summary section details the taxable income calculation for the period.

15 - CGT report

The following methodology is used to calculate taxable income:

  1. The cost base of the shares is adjusted for any capital returns or capital reconstructions.

  2. If there are any capital losses during the period, these are deducted from any gains made on shares held for less than 12 months. Any residual losses are then deducted from capital gains on shares held for more than 12 months.

  3. The capital gains made on shares held for more than 12 months (less any losses if applicable) are discounted by your discount rate (this can be changed within Tax settings).

  4. Any capital gains on shares held for less than 12 months (as calculated in point 2) are added to any discounted capital gains on shares held for more than 12 months (as calculated in point 3). This amount is the capital gain for the period.

Note: Returns of capital give rise to a capital gain where the amount of the capital returned exceeds the cost base of the share, or where the shares to which the return of capital relates are sold before the return of capital is received. In either of these cases an ‘unallocated capital return’ is added to either the capital gain on shares held for less than 12 months or the capital gain on shares held for more than 12 months as appropriate. Please see ATO example

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.

Click the current lock date ‘sale allocation methods’ link

sale allocation methodmodify Sale Allocation Methods

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.

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.

Last modified on October 23, 2018 UTC