It is one of the most common questions from new investors: if my shares are up but I have not sold, do I owe tax? In Australia, the short answer is no, with one important exception.

Unrealised gains are not taxed

Capital gains tax only applies when you dispose of shares. A holding that has doubled on paper is an unrealised gain, and the ATO does not tax it until you actually sell, transfer or gift the shares. You could hold for a decade and never trigger CGT if you never dispose.

Dividends are the exception

While the growth is untaxed until you sell, any dividends you receive along the way are assessable income in the year you receive them, even if you reinvest them. So a buy-and-hold investor with no sales can still have a tax obligation from dividends.

Why records still matter

Even though you are not taxed yet, the cost base you set today decides the size of the gain when you eventually sell. Good records now save money later.

Track it from day one

Summ records the cost base of every parcel and every dividend as you go, so the numbers are ready whenever you decide to sell.

Get started with Summ.

This article is general information only and does not take your personal circumstances into account. For advice specific to your situation, speak to a registered tax agent.