Methodology and accuracy testing

Test results: 16 of 16 official examples reproduced

Every time the site is built, the calculation engine is run against worked examples published by the ATO and Treasury. The build fails if any result is wrong. These are the results from the current build (16 October 2026):

Where the ATO rounds intermediate figures down to whole dollars (Farnaz, Peter), our unrounded result is within $1. A further 25 unit and regression tests cover the 12-month rule (including 29 February purchases), same-day trades, financial-year allocation, companies, super funds, foreign and part-year residents (s115-115), pre-CGT assets before and after 1 July 2027, the 2027–28 loss order, parcel matching and input validation. Each section of the site was also fact-checked claim by claim by independent reviewers against the ATO, the Act and Treasury material on 16 October 2026; every error they found has been corrected and covered by a test.

How the engine works

1. Per asset: capital proceeds less cost base (five elements, less capital works deductions) gives a gain; a loss uses the reduced cost base (excluding holding costs). Ownership share is applied to all amounts.
2. Exemptions: pre-CGT assets (before 20 Sep 1985), full main residence, partial main residence (non-main-residence days ÷ days owned, counting both contract days, as the ATO does), and the home-first-used-to-produce-income market value rule (with the discount clock restarting).
3. Discount: 50% for resident individuals (and trusts) after 12 months excluding the acquisition and event days; 33⅓% for complying super funds; none for companies; apportioned for foreign residents under the s115-115 pro-rata method.
4. Indexation (pre-21 Sep 1999 assets): factor = 68.7 ÷ CPI for the quarter of each cost, rounded to 3 decimal places. The engine tests indexation and the discount and keeps whichever gives the lower net capital gain, as the ATO calculator does.
5. Losses: for CGT events before 1 July 2027, current-year and carried-forward losses are applied to non-discount gains first, then discount gains (the ATO’s recommended order), and then the discount is applied. From 2027–28, losses go to deferred (pre-1 July 2027) gains first and post-reform gains last, as the new s102-5 requires.
6. Tax: tax on (other taxable income + net capital gain) minus tax on other income, using the ATO rate scale for the financial year of the contract date, the low income tax offset ($700 tapering to nil at $66,667) and the Medicare levy (with the low-income reduction). Super funds: 15%. Companies: 25% or 30%.
7. Parcels (shares, crypto): FIFO, or specific identification choosing parcels with the lowest taxable gain per unit first. Sale proceeds and brokerage are allocated per unit.

Tax data used

Sources: ATO resident and foreign resident rate tables, ATO Medicare levy reduction thresholds, ATO Guide to CGT Appendix 2 (CPI 1985–1999). 2027–28 resident rates reflect the legislated 14% bottom rate. Medicare thresholds for 2026–27 onwards had not been published at review and are carried forward from 2025–26.

How the 2027 reform is modelled

• Applies to resident individuals for CGT events from 1 July 2027 (contract date). Companies, super funds and foreign residents stay on the existing rules.
• Assets held on 1 July 2027 are split using either a market value you enter or Treasury’s August 2026 draft apportionment method (real property and assets without a readily ascertainable value). The engine reproduces Treasury’s published examples exactly.
• Post-2027 cost base = 30 June 2027 value × CPI factor + later improvements (indexed from the midpoint between 1 July 2027 and the sale, as a simplification) + selling costs (not indexed). Future CPI is unknown, so you choose an assumed inflation rate (default 2.5%, the midpoint of the RBA target band). Pass explicit CPI index numbers to reproduce Treasury’s example.
• Minimum tax = 30% × post-2027 net capital gain − income tax attributable to that gain at marginal rates (basic income tax liability at the rate scale, before offsets and excluding the Medicare levy, as section 119-10 of the Act requires), rounded down to whole dollars. Income support recipients can switch it off. Part-year residents are not modelled.
• Pre-CGT assets (acquired before 20 Sep 1985) sold from 1 July 2027 are reset to their 30 June 2027 value for every entity type, so only later gains are taxed.
• Pre-1 July 2027 component keeps the 50% discount if the asset is held at least 12 months in total. Partial main residence exemptions are applied proportionally to both components.

Limitations – what the calculator doesn’t do

• It doesn’t know your full tax position: other offsets (e.g. SAPTO, franking credits), HELP repayments, Medicare levy surcharge, family Medicare thresholds and the Working Australians Tax Offset (from 2027–28) aren’t modelled.
• Small business concessions, rollovers, inherited assets (2-year rule), deceased estates, trusts’ streaming and part-year residency are not calculated – see the relevant guides.
• Foreign residents’ market value method for assets held at 8 May 2012 isn’t modelled (pro-rata only).
• Capital works deductions are treated as reducing the pre-1 July 2027 cost base; deductions claimed after that date should reduce the post-reform part instead.
• Improvements are indexed from the midpoint of the relevant period rather than the quarter each was incurred, and pre-1999 improvements aren’t indexed in the frozen-indexation comparison.
• The 2027 minimum tax isn’t applied to part-year residents, and residential vs non-residential gain categories aren’t separated in the loss order.
• Post-2027 results depend on future CPI, the final apportionment method and second-tranche legislation.
• Results are estimates for general information. They are not tax advice.

Review process

Rates and rules are checked against primary sources – the ATO, Treasury, the Federal Register of Legislation and the Parliamentary Library – at least every quarter, on 1 July each year, and whenever the law changes. Each page shows its review date. The engine code and tests are versioned so every change is traceable. Found something wrong? Email hello@cgtcalculatoraustralia.com – corrections are made within two business days.

References

Every figure on this page was checked against these primary sources on 16 October 2026.

1. ATO – How to calculate your CGT
2. ATO – Cost base of assets
3. ATO – Cost base adjustments for capital works
4. ATO – CGT discount
5. ATO – Using capital losses to reduce capital gains
6. ATO – Indexing the cost base
7. ATO – Guide to CGT 2025, Appendix 2: CPI
8. ATO – Your main residence (home)
9. ATO – Using your home for rental or business
10. ATO – Treating former home as main residence (6-year rule)
11. ATO – CGT discount for foreign residents
12. ATO – Main residence exemption for foreign residents
13. ATO – Foreign resident capital gains withholding
14. ATO – Keeping records of shares and units
15. ATO – Capital gains tax reform (published 13 Oct 2026)
16. ATO – Tax rates: Australian residents
17. ATO – Tax rates: foreign residents
18. ATO – Medicare levy reduction for low-income earners
19. ATO – Low income tax offset
20. ATO – Small business CGT concessions
21. ATO – How to work out and report CGT on crypto
22. Treasury Laws Amendment (Tax Reform No. 1) Act 2026 (No. 49, 2026) – Federal Register of Legislation
23. Parliament of Australia – Bills Digest No. 67 2025–26: Treasury Laws Amendment (Tax Reform No. 1) Bill 2026
24. Treasury – Draft apportionment method (exposure draft explanatory statement, Aug 2026)
25. Income Tax Assessment Act 1997 (Federal Register of Legislation)

General information only – not financial or tax advice. See our disclaimer. Spotted an error? Email hello@cgtcalculatoraustralia.com.