Australian tax residents pay CGT on gains from selling any shares — whether on the ASX or on overseas exchanges such as the NYSE or Nasdaq. The rules are broadly the same as for ASX shares, but you must convert all values to Australian dollars and there are additional considerations around foreign tax paid.
CGT Applies to International Shares
If you are an Australian resident for tax purposes, your worldwide income is assessable in Australia. This includes capital gains from selling:
- US shares (Apple, Tesla, S&P 500 ETFs via Stake, Interactive Brokers, etc.)
- UK, European, Asian, or other international shares
- Shares in foreign-listed ETFs
The same rules apply: calculate the gain, apply losses, and apply the 50% discount if held for more than 12 months.
Converting to AUD
All CGT calculations must be done in Australian dollars. You convert:
- The cost base (purchase price) to AUD using the exchange rate on the date of acquisition
- The capital proceeds (sale price) to AUD using the exchange rate on the date of disposal
You cannot use a single average rate for the year or the current exchange rate. Each transaction must use the rate applicable on the actual date.
Acceptable exchange rate sources include the Reserve Bank of Australia (RBA) historical rates at rba.gov.au.
Example: Selling US Shares
| Item | USD | AUD (approximate) |
|---|---|---|
| 10 shares purchased @ US$150 | US$1,500 | A$2,250 (rate: 0.67) |
| 10 shares sold @ US$220 | US$2,200 | A$3,300 (rate: 0.67) |
| Capital gain | A$1,050 | |
| 50% discount (held 18 months) | A$525 taxable |
Note: The exchange rate will differ between purchase and sale dates, which adds an additional variable to the gain calculation.
Foreign Income Tax Offsets (FITO)
If you paid tax on the gain in the foreign country (e.g., US withholding tax on dividends, or tax paid in another jurisdiction), you may be able to claim a Foreign Income Tax Offset (FITO) to reduce your Australian tax on the same income.
The FITO is limited to the Australian tax that would have applied to that income. It is claimed in your Australian tax return.
Note: The US does not impose capital gains withholding tax for individual Australian investors on share sales. However, US dividends paid to Australian investors are generally subject to 15% US withholding tax (under the Australia-US tax treaty).
Dividends vs Capital Gains
Foreign dividends are ordinary income (not capital gains) and are included in your assessable income at the AUD value received, plus any foreign tax withheld. You may claim a FITO for the foreign tax withheld.
Foreign capital gains from share sales follow the CGT rules above.
Australian-Listed International ETFs vs Foreign-Listed ETFs
- Australian-listed ETFs investing in international assets (e.g., Vanguard MSCI Index International Shares ETF — VGS on ASX): CGT calculated in AUD; standard rules apply
- Foreign-listed ETFs (e.g., Vanguard ETFs listed on NYSE): additional complexity — PFIC rules may apply if the fund is a US-registered fund; specialist advice is recommended for these
For most Australian investors using ASX-listed ETFs with international exposure, standard Australian CGT rules apply.
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Frequently Asked Questions
Do Australian residents pay CGT on US shares? Yes. Australian tax residents pay CGT on gains from selling US shares (and any other foreign shares). The gain must be calculated and reported in AUD in your Australian tax return.
What exchange rate do I use for CGT on foreign shares? You must use the exchange rate on the date of each transaction — the acquisition date for the cost base, and the disposal date for the proceeds. The RBA publishes historical exchange rates at rba.gov.au.
Do I have to pay tax in both countries on foreign share gains? Generally no — Australia’s tax treaties are designed to prevent double taxation. If you pay tax in the foreign country, you may be able to claim a Foreign Income Tax Offset to reduce your Australian tax.
This article provides general tax information for FY2025–26. For advice tailored to your situation, speak with a registered tax agent or accountant. Find one through the Tax Practitioners Board register.