You cannot make capital gains tax (CGT) disappear, but you can legally and significantly reduce it with a bit of planning. Because a net capital gain is simply added to your income and taxed at your marginal tax rate, the levers that matter are: how long you hold, when you sell, what losses you can offset, and how you use the concessions built into the super and tax systems. This guide walks through the legitimate strategies — nothing here is aggressive or grey-area.
It sits under our pillar, capital gains tax in Australia. A quick note first: the aim is to minimise CGT within the rules, not to evade it. Deliberately hiding gains is tax evasion and the ATO’s data-matching makes it easy to detect.
1. Hold assets for more than 12 months
The simplest and most valuable strategy is to hold eligible assets for more than 12 months so you qualify for the 50% CGT discount — you only pay tax on half the gain. For individuals and trusts this can roughly halve the tax on an investment profit.
Because the discount applies to the whole eligible gain, the difference between selling at 11 months and 13 months is dramatic. If you are close to the mark and circumstances allow, waiting a few weeks can be worth thousands. See the CGT discount and 12-month rule for the mechanics.
2. Time the sale for a lower-income year
Your discounted gain is still taxed at your marginal tax rate, so when you sell matters. Selling in a year when your other income is low means the gain is taxed more lightly. Good candidates include:
- A career break, parental leave or a gap year
- The first year of retirement, before other income kicks in
- A year when your business income is down
Remember the CGT event is the contract date, not settlement — so you have some control over which financial year a gain falls into. Check current income tax brackets at ato.gov.au to see how much difference a lower-income year makes.
3. Use capital losses to offset gains
Capital losses are one of the most under-used tools. Losses from any capital asset — shares, crypto, property — can offset your capital gains, and carry forward indefinitely until you have gains to use them against.
Two techniques:
- Realising losses in the same year as gains. If you are sitting on an underperforming asset you no longer want, selling it before 30 June crystallises a loss you can offset against gains in the same year.
- Ordering losses correctly. Apply losses to your non-discounted gains first (assets held under 12 months), so more of your discounted gains survive.
The full detail — including how to bank losses for the future — is in capital losses and carry-forward. One caution: the ATO looks closely at “wash sales”, where you sell purely to book a loss and then buy the same asset straight back. Don’t do it.
4. Make a concessional super contribution
This is where CGT planning meets retirement planning. If you have a large gain in a particular year, making a concessional (before-tax) super contribution can reduce your taxable income, softening the impact of the gain — while also building your retirement savings.
Concessional contributions are taxed at 15% inside super (or 30% for very high earners under Division 293), which is often well below the marginal rate that would otherwise apply to the gain. The concessional cap is $30,000 in 2025-26, rising to $32,500 from 1 July 2026. If you haven’t used your full cap in recent years, the carry-forward (catch-up) rules may let you contribute more in a single year — useful precisely when you have a big gain to offset.
Two related strategies are worth reading:
- Salary sacrifice super — the standard way to make regular before-tax contributions and lower your taxable income over time.
- Super contribution caps 2026-27 — the current caps, the catch-up rules and how to use them.
For assets already held inside super, the tax is even more favourable — see CGT and SMSF / super, where the discount is 33.3% and gains in pension phase can be effectively tax-free.
5. Choose the right owner and the right parcel
- Ownership. Individuals and trusts get the 50% discount; companies get none. How an asset is held affects the eventual CGT.
- Parcel selection. If you hold the same share in multiple parcels, you can generally choose which to sell — picking a higher-cost-base parcel or one held past 12 months. See CGT on shares.
Putting it together: a worked scenario
Jess expects a $60,000 gross gain from selling shares she has held for two years, in a year when she also received a redundancy and has room in her super cap.
| Step | Effect |
|---|---|
| Gross gain (held >12 months) | $60,000 |
| Offset a $10,000 carried-forward loss | $50,000 |
| Apply 50% discount | $25,000 net gain |
| Make a $25,000 concessional super contribution | Reduces taxable income by $25,000 |
By combining the discount, a carried-forward loss and a concessional contribution, Jess sharply reduces the tax on the gain while boosting her super — all within the rules.
6. Spread ownership and consider the timing over years
If an asset is jointly owned — for example, by a couple — the gain is split according to each owner’s legal interest, so each person adds their share to their own income and applies their own marginal rate. Where one partner earns much less than the other, holding an income-producing asset in the lower earner’s name (decided when the asset is acquired, not retrospectively) can reduce the eventual CGT. This has to be weighed against other factors like asset protection and who provides the funds, so it is a decision for the purchase stage rather than the sale.
You can also stagger disposals across financial years. If you hold a large parcel of shares, selling half before 30 June and half after can split the gain across two years, potentially keeping more of it out of the top brackets. This works for shares (where you control the exact sale dates) far better than for property (a single contract), but it is a simple lever many investors overlook.
Don’t forget the assets already inside super
The strategies above deal with assets held in your own name. Assets held inside super enjoy their own concessions — a 33.3% discount in accumulation and effectively nil CGT in pension phase — which is why long-term investments are often more tax-effective there. If you are years from retirement, directing new savings into super via salary sacrifice not only lowers your income tax now but shifts future growth into a lower-CGT environment. See CGT and SMSF / super for how that works.
Common pitfalls
- Selling just before 12 months and losing the discount.
- Wash sales — selling and rebuying the same asset to manufacture a loss.
- Exceeding your super caps, which triggers extra tax and undoes the benefit.
- Forgetting the contract date controls which year the gain falls in.
- Chasing tax over investment sense — never let the tax tail wag the investment dog.
For the numbers behind any of these moves, our CGT calculator guide shows the full working.
This article is general information only and not financial or tax advice; consider your own circumstances and speak to a licensed adviser or the ATO before acting.