How to Calculate Capital Gains Tax on US Shares in Australia
If you're an Australian resident who owns US shares — whether through Superhero, SelfWealth, or any other platform — capital gains tax (CGT) is calculated and reported in Australian dollars. Not US dollars. Australian dollars.
That means every buy and every sell needs to be converted to AUD, using the right exchange rate, at the right point in time. Get it wrong and your cost base is wrong. Your gain or loss is wrong. Your tax return is wrong.
This article walks through how it actually works, which exchange rates to use, and where most people trip up.
The basic rule: everything must be in AUD
The ATO requires all foreign income, deductions, and capital gains to be converted to Australian dollars before they're included in your tax return. This applies to US shares and other foreign-denominated assets.
For CGT purposes, two key amounts are converted to AUD:
- Cost base — what you paid for the shares (in AUD, at the exchange rate when you bought them)
- Capital proceeds — what you received when you sold (in AUD, at the exchange rate when you sold them)
Your capital gain or loss is the difference between these two AUD amounts. Not the USD amounts. The AUD amounts.
Source: ATO — Foreign exchange rates
Which exchange rate do you use?
This is where it gets messy. The ATO provides two options:
1. Spot rate (at the time of transaction)
The exchange rate prevailing on the specific date of purchase or sale. This is the most precise method. You'd use the RBA's published daily rate for each transaction date.
2. Average monthly rate
The ATO publishes monthly average exchange rates (sourced from the Reserve Bank of Australia since 1 January 2020). You can use the average rate for the month in which the transaction occurred, provided it's a “reasonable approximation” of the spot rate.
For most retail share investors buying and selling through a broker, the monthly average rate is a common choice. You're not making dozens of forex transactions a day — you're buying and selling shares, and the monthly rate is close enough to be reasonable and far easier to track.
Important: The ATO's published rates are sourced from the Reserve Bank of Australia. For daily rates, the RBA publishes these on their website. CGT Strategist uses ATO monthly rates and includes the exact rate used in every Evidence Pack for full traceability.
A worked example
Let's say you bought 100 shares of a US stock through Superhero:
Purchase
- Date: 15 March 2023
- Price: US$50.00 per share
- Brokerage: US$0 (no commission on this trade)
- Total cost: US$5,000.00
- ATO monthly average rate for March 2023: AUD/USD = 0.6687
- Cost base in AUD: $7,477.19 (US$5,000 ÷ 0.6687)
Sale
- Date: 20 November 2024
- Price: US$65.00 per share
- Total proceeds: US$6,500.00
- ATO monthly average rate for November 2024: AUD/USD = 0.6536
- Proceeds in AUD: $9,944.91 (US$6,500 ÷ 0.6536)
Capital gain: $9,944.91 − $7,477.19 = $2,467.72
Held for more than 12 months, so the 50% CGT discount may apply:
Discounted capital gain: $1,233.86
Now here's the thing most people miss — even if the share price hadn't moved at all in USD terms, you could still have a capital gain (or loss) purely from the exchange rate moving. The AUD weakening from 0.6687 to 0.6536 means your USD proceeds convert to more AUD. Under ATO guidance, that difference is treated as a capital gain for CGT purposes.
The hidden FX trap
This is the part that catches people out. Let's use an extreme example to make the point:
You buy 100 shares at US$50 when AUD/USD is 0.7500 (AUD cost base: $6,666.67).
You sell those same 100 shares at US$50 — the exact same price — but now AUD/USD is 0.6200 (AUD proceeds: $8,064.52).
You made zero profit in USD. But in AUD terms, you have a $1,397.85 capital gain purely from the exchange rate shift. Under ATO guidance, this is treated as a capital gain.
This works in reverse too. If the AUD strengthens between your buy and sell dates, you can have a capital loss in AUD even if the stock went up in USD. The FX conversion cuts both ways.
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What about brokerage and other costs?
Buy brokerage and other incidental costs of acquisition form part of your cost base, while sell brokerage reduces your capital proceeds. Both need to be converted to AUD at the same exchange rate as the transaction they relate to.
Whether FX conversion fees form part of your cost base depends on how your broker structures the transaction. Where currency is converted as a separate step before trading (as with platforms like Stake and Superhero), the conversion may be treated as a distinct transaction rather than an incidental cost of acquiring the shares. Where the broker handles currency conversion as part of the trade itself, the fees may form part of the cost base. This is an area worth discussing with your tax professional.
Regardless of how FX fees are treated, for CGT purposes the ATO rate is typically used for converting the share transaction itself to AUD.
Some things to include in your cost base:
- Purchase price (converted to AUD)
- Brokerage or commission (converted to AUD)
- Any other incidental costs of acquisition
And to include in your capital proceeds:
- Sale price (converted to AUD)
- Less any incidental costs of disposal (brokerage, converted to AUD)
What if I hold US shares across multiple parcels?
This is where it compounds. If you've bought the same US stock multiple times at different prices and different exchange rates, each purchase creates a separate parcel with its own AUD cost base.
Example: You bought a US tech stock three times:
| Parcel | Date | Shares | USD Price | AUD/USD Rate | AUD Cost Base |
|---|---|---|---|---|---|
| 1 | Jan 2022 | 50 | US$250 | 0.7179 | $17,411.90 |
| 2 | Jun 2023 | 50 | US$150 | 0.6708 | $11,180.68 |
| 3 | Feb 2024 | 50 | US$200 | 0.6530 | $15,313.94 |
When you sell 50 shares, which parcel are you disposing of? Under FIFO, it's Parcel 1. Under specific parcel selection, you choose.
The AUD cost base for each parcel is different — not just because the USD price was different, but because the exchange rate was different. Parcel 2 cost less per share in USD than Parcel 3, but converted at a different rate. The combination of share price movement and FX movement determines your actual AUD cost base for each parcel.
Managing this across a portfolio of US stocks, each with multiple parcels, each at different exchange rates, is where spreadsheets start to break.
For a detailed explanation of how parcel selection works, see our articles: CGT Parcel Selection Methods Explained and How Does Specific Parcel Selection Work for CGT?
Common mistakes with US share CGT
Some people calculate their gain in USD and then convert that single number to AUD. This is incorrect. Each transaction (buy and sell) needs to be converted to AUD separately using the exchange rate applicable at the time of each transaction, then the gain is calculated from those AUD amounts.
As shown above, exchange rate shifts can affect the size of your capital gain or loss for CGT purposes. If you're only looking at your USD profit, you may not be seeing the full picture.
The ATO expects you to keep records of the exchange rates used. If you're audited, “I used the rate my broker gave me” may not be sufficient. Referencing published ATO/RBA rates and documenting which rate was applied to each transaction provides a stronger audit trail.
How CGT Strategist handles US shares
CGT Strategist was built with US share investors in mind. When you upload your broker CSV:
- Automatic FX conversion — every buy and sell is converted to AUD using ATO-published monthly exchange rates. Where ATO rates are not yet available for a given month, an estimated rate is used and clearly flagged so you know to verify it.
- Per-parcel FX tracking — each parcel records the exchange rate used at the time of purchase, so your AUD cost base is always accurate.
- Complete FX audit trail — your Evidence Pack includes the exact exchange rate applied to every transaction, ready for your accountant or the ATO.
Modelling is free and unlimited. You only pay ($79.99 incl. GST) when you export your Evidence Pack for a financial year.
Important: CGT Strategist is a calculation tool, not a tax agent. Results are based on the data you provide and should be reviewed by a registered tax professional.
No subscription, ever.
Upload your broker CSV and model your parcels free.
Unlock your Evidence Pack for $79.99 and regenerate it as many times as you need.
Summary
| Step | What to do |
|---|---|
| Convert purchases to AUD | Use ATO monthly rate (or RBA daily rate) at time of purchase |
| Convert sales to AUD | Use ATO monthly rate (or RBA daily rate) at time of sale |
| Calculate gain/loss in AUD | AUD proceeds minus AUD cost base |
| Apply CGT discount if eligible | 50% discount if held 12+ months |
| Keep FX records | Document which exchange rate was used for every transaction |
Frequently asked questions
Which ATO exchange rate should I use for US shares?
The ATO publishes monthly average rates sourced from the Reserve Bank of Australia. For most retail investors, the monthly rate for the month of each transaction is commonly used. For more precision, the RBA publishes daily rates on their website. CGT Strategist currently uses ATO monthly rates; daily rates are not yet supported.
What if my broker gives me a consolidated report in USD?
Each transaction still needs to be converted individually to AUD using the appropriate exchange rate. A single USD profit figure converted at year-end is not correct for CGT purposes. CGT Strategist lets you select the currency when you import your broker CSV, and handles the per-transaction conversion automatically.
Which brokers does CGT Strategist support for US shares?
CGT Strategist natively supports CSV imports from Superhero, SelfWealth, and NAB Trade. Other brokers are supported via the custom mapping tool or generic CSV template, which allows any broker's CSV format to be mapped in seconds.
Can the FX conversion create a loss even if my stock went up?
If conditions allow it, yes. If the AUD strengthens significantly between your purchase and sale dates, the AUD value of your proceeds could end up lower than your AUD cost base — even if the stock price increased in USD terms.