When you sell ASX-listed ETF units for more than they cost you, a capital gains tax obligation generally arises. Many investors calculate it incorrectly, usually by missing brokerage, AMIT cost base adjustments or DRP parcels. This guide covers how CGT works for ETFs in Australia, including the 50% discount for eligible individuals and SMSFs, the cost base, AMIT adjustments and how the ETFLens CGT & Cost Base Calculator can help with the record keeping.
Last updated: Q2 2026. This article is general information only and does not constitute financial or tax advice.
What triggers CGT on ETFs?
CGT applies on a disposal of your units, not while you hold them. The common CGT events for ETF investors are selling units on market, switching from one fund to another (a switch is a sale of the old fund followed by a purchase of the new one, so the sale leg is a disposal), transferring units to another person or entity, and the transfer of units on death (special rules apply to deceased estates, where the cost base generally passes to the beneficiary rather than triggering immediate tax). Receiving a distribution is not a disposal: distributions are income and are taxed under different rules, covered in our guide to how ETF distributions are taxed. This is general information only, not tax advice.
How to calculate a capital gain on ETF units
The core formula is simple: capital proceeds minus cost base. Proceeds are what you received for the units, less incidental costs of the sale such as brokerage. The cost base is what the units cost you, including incidental costs of acquisition. If the result is positive you have a capital gain; if it is negative you have a capital loss, which can offset capital gains in the same year or be carried forward. The complexity is rarely in the formula. It is in knowing the correct cost base for the specific units you sold, which is where parcels, DRP and AMIT adjustments come in. This is general information only, not tax advice.
What goes into the cost base
For a typical ETF parcel, the cost base includes the purchase price of the units, plus brokerage and other incidental acquisition costs, plus or minus the accumulated AMIT cost base adjustments reported on your annual tax statements. Two investors who bought the same units on the same day can have different cost bases years later if one reinvested distributions and the other did not, because their parcels and adjustments differ. Keeping per-parcel records from the start is far easier than reconstructing them at sale time. This is general information only, not tax advice.
The 50% CGT discount
Individuals and complying superannuation funds (including SMSFs) that hold units for more than 12 months before the disposal can generally reduce the capital gain. For individuals the discount is 50%; for super funds in accumulation phase it is one third. Companies are not eligible for the discount at all. The holding period is measured per parcel, from each parcel's acquisition date to the disposal date, which is why parcel selection matters: selling a parcel held 11 months produces a full gain while selling one held 13 months produces a discounted gain. Capital losses are applied before the discount and are never themselves discounted. This is general information only, not tax advice.
FIFO, MinGain and MaxGain: choosing which parcels you sold
When you sell part of a holding bought in several lots, you need to identify which parcels were sold. Three common approaches:
- FIFO (First In, First Out). The earliest-purchased parcels are treated as sold first. It is the simplest default and often satisfies the 12-month discount test because the oldest parcels have the longest holding period.
- MinGain. Selects the parcels that produce the smallest taxable gain this year, typically the highest-cost-base parcels first. This defers gains rather than eliminating them: the low-cost-base parcels remain and will realise larger gains later.
- MaxGain. Selects the parcels that produce the largest gain now. Some investors use this in a year with capital losses to absorb, or a low-income year. The same deferral logic applies in reverse.
The ATO accepts specific identification of parcels where your records support it. Which method suits a particular year depends on individual circumstances that ETFLens cannot assess, so this article describes the mechanics only. A registered tax agent can advise on selection. This is general information only, not tax advice.
DRP units create new parcels
If you participate in a distribution reinvestment plan, every reinvestment creates a brand new parcel with its own cost base (the reinvestment price) and its own acquisition date. A holder who has reinvested quarterly for five years has approximately 20 additional parcels beyond their original purchases, each with a different holding period for the 12-month discount test. The reinvestment itself is not a disposal, so it does not trigger CGT, but the distribution being reinvested is still assessable income in the year it is attributed. You can track upcoming ex-dividend dates for your funds with the ETFLens Distribution Calendar. This is general information only, not tax advice.
AMIT cost base adjustments
Most ASX ETFs operate under the Attribution Managed Investment Trust (AMIT) regime. Each year your AMIT Member Annual statement may report an AMIT cost base net amount, which adjusts the cost base of your units up or down. An upward adjustment typically arises when the amounts attributed to you exceeded the cash you were paid; a downward adjustment typically arises from tax-deferred amounts. The adjustment applies to the units you held during that year, spread pro-rata across your parcels. Missing these adjustments is one of the most common CGT errors ETF investors make, and over several years the cumulative effect on the cost base can be material. This is general information only, not tax advice.
A worked example
A hypothetical example with illustrative numbers, ignoring AMIT adjustments for simplicity:
- Buy 100 VAS units at $95.00: $9,500.00 plus $19.95 brokerage gives a cost base of $9,519.95.
- Sell all 100 units 18 months later at $105.00: $10,500.00 minus $19.95 brokerage gives capital proceeds of $10,480.05.
- Capital gain: $10,480.05 minus $9,519.95 = $960.10.
- The parcel was held more than 12 months, so an eligible individual applies the 50% discount: $480.05 is the taxable capital gain included in assessable income.
The tax payable on that $480.05 then depends on the investor's marginal rate. With multiple parcels, DRP units and AMIT adjustments in the mix, the same sale requires this calculation for every parcel sold. This is a hypothetical illustration only, not tax advice.
Capital losses, and the records you need
If your proceeds are less than the cost base, you have a capital loss. Capital losses offset capital gains made in the same financial year, and any excess carries forward indefinitely to offset future gains; they cannot be deducted against ordinary income such as salary or distributions. The ordering matters: losses are applied against gains before the 50% discount is calculated, and where you have a choice, the ATO permits applying losses against non-discounted gains first, which preserves more of the discount. None of this works without records. For every parcel you need the acquisition date, the number of units, the price paid, the brokerage, and the running total of AMIT cost base adjustments from each year's tax statement. Brokers report trades but generally do not track AMIT adjustments for you, so the cost base on a broker statement is often not the cost base the tax law expects. This is general information only, not tax advice.
How the ETFLens CGT Calculator helps
The ETFLens CGT & Cost Base Calculator (a Pro tool) is built around exactly these mechanics. It tracks each parcel separately, applies FIFO, MinGain or MaxGain matching to a sale, treats every DRP reinvestment as its own parcel, spreads AMIT cost base adjustments pro-rata across the parcels you held, and flags which parcels meet the 12-month discount holding period for individuals and SMSFs. It can also import your purchase history directly from CommSec, Selfwealth, Pearler and Stake CSV exports, processed entirely in your browser. The output is an estimate of the capital gain and discount eligibility, designed for your records and for a conversation with your accountant, not a substitute for one. This is general information only, not tax advice.
This is general information only and does not constitute tax advice. Tax rules are complex and individual circumstances vary. Consult a registered tax agent or accountant before lodging your return.