Understanding the CGT Report
Last updated on August 15, 2025
Disclaimer: Taxtallee is not a financial product advisory service and does not provide financial advice. All information available through Taxtallee is purely numerical in nature and is based on a combination of publicly available data, user-provided inputs, and other accessible data sources. Any reports or outputs generated by Taxtallee are the result of our internal performance methodologies and standard calculation practices. This information does not constitute financial advice, recommendations, or professional opinions. If you have questions regarding how to complete your tax forms we recommend that you obtain independent financial/tax advice from a qualified professional.
The Capital Gains Tax (CGT) Manager is your primary tool for calculating, optimizing, and finalizing your capital gains and losses for the financial year. It transforms your raw transaction data into a clear, actionable summary ready for your tax return.
What is Capital Gains Tax (CGT)?
In Australia, CGT is the tax you pay on the profit (capital gain) you make from selling an asset, such as shares. It's not a separate tax but is included as part of your income tax. A capital gain is calculated as your Total Proceeds minus your Cost Base. If the result is negative, it's a capital loss.
Sale Allocation: The Key to CGT Optimisation
When you sell shares, you need to match those sold shares against the shares you previously bought. This is called "lot allocation." The method you choose can significantly impact your tax outcome. Taxtallee allows you to model different scenarios before confirming.
Allocation Methods Explained
- FIFO (First-In, First-Out): The most common method. It assumes you sell your oldest shares first. This often leads to long-term gains, which may be eligible for a discount.
- LIFO (Last-In, First-Out): Assumes you sell your newest shares first. This can be useful in a falling market to realize losses or in a rising market to realize short-term gains.
- Maximise Profit: Sells the shares with the lowest cost base first to generate the highest possible capital gain.
- Maximise Loss: Sells the shares with the highest cost base first to generate the largest possible capital loss, which can be used to offset other gains.
- Minimise CGT: An intelligent method that prioritizes realizing losses first (short-term then long-term), then realizing long-term gains (to get the discount), and finally short-term gains. This is often the most tax-effective strategy.
Understanding the CGT Calculation Summary
The summary at the bottom of the CGT Manager brings everything together. Here's what each line means:
- Short-Term Gains: Profit from assets held for less than 12 months. These are taxed at your full marginal income tax rate.
- Long-Term Gains: Profit from assets held for 12 months or more. These are eligible for the CGT discount (50% for individuals).
- Capital Gains from Distributions: This figure is pulled from your confirmed Taxable Income report. It represents the capital gains your ETFs or Managed Funds have passed on to you.
- Current Year Losses: The total of all capital losses you've realized in this financial year.
- Prior Year Losses: Capital losses from previous financial years that you haven't used yet.
- Applied Losses: Taxtallee automatically applies your total losses to offset your gains, first against short-term gains and then against long-term gains, which is the most tax-effective way.
- Net Capital Gain: Your final taxable capital gain for the year, after applying the CGT discount to any remaining long-term gains. This is the figure you'll use in your tax return.
- Losses Carried Forward: Any unused capital losses that will be available to offset gains in future years.