Tax on the profit when you sell an asset for more than you paid. In Australia, individuals who held the asset for more than 12 months pay tax on only half the gain.
A capital gain is the sale price less the cost base (purchase price plus costs). In Australia it is added to taxable income in the year of sale. Individuals and trusts get a 50% discount on gains from assets held for more than 12 months; super funds get one-third.
Capital losses can be offset against capital gains, and carried forward. Shares, ETFs, property other than the main residence, and crypto are all subject to CGT.
Why it matters
The 12-month discount rewards holding for longer and is a real cost of frequent trading. Timing of sales around the end of the financial year (30 June) affects which year's tax a gain falls in.
