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Preiter(Newbie)Newbie
30 Aug 2024

Example - this November I have shares vesting from an employer (a bonus essentially)


example being 10 shares at $1000 best on November 10. My understanding is at tax time, I need to pay tax on the $1000 at my highest marginal rate.


but what if I sell within 30 days and the value of the shares is $1200? At tax time am I paying tax twice? Ie a tax event of $1000 AND $1200? Or just what I sell at? So the shares come, I sell right away, and put aside the amount for tax.


do I understand correctly?


and after 12 months, if the shares which were $1000 are now worth $2000 and I share, I pay CGT on $500 of that at my highest rate.


Hope I understand right!


explain it to me like I’m 10 years old, thanks!

4,002 views
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4,002 views
1 replies

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Most helpful reply

Matt_ATO(Community Support)Community Support
2 Sept 2024

Howdy @Preiter,


On November 10, you get 10 shares worth $1,000 each. This is considered income, so you pay tax on $10,000 at your highest marginal rate.


If you sell the shares within 30 days (let’s say for $1,200 each), the tax rules change a bit.


The important thing is that you only pay tax once:

You pay tax on the $12,000 (10 shares x $1,200) because you sold them within 30 days. This becomes your new taxable amount.


If you hold the shares for more than 12 months and then sell them:

You pay CGT on the profit. For example, if you sell them for $2,000 each after a year, your profit is $1,000 per share.


Since you already paid tax on the initial $1,000 value, you only pay CGT on the additional $1,000 gain.



All replies

Most helpful reply

Matt_ATO(Community Support)Community Support
2 Sept 2024

Howdy @Preiter,


On November 10, you get 10 shares worth $1,000 each. This is considered income, so you pay tax on $10,000 at your highest marginal rate.


If you sell the shares within 30 days (let’s say for $1,200 each), the tax rules change a bit.


The important thing is that you only pay tax once:

You pay tax on the $12,000 (10 shares x $1,200) because you sold them within 30 days. This becomes your new taxable amount.


If you hold the shares for more than 12 months and then sell them:

You pay CGT on the profit. For example, if you sell them for $2,000 each after a year, your profit is $1,000 per share.


Since you already paid tax on the initial $1,000 value, you only pay CGT on the additional $1,000 gain.



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