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Picture Book · Tax in depth

What a capital gain is

Story pages

A man in his early fifties with grey stubble watering a vegetable garden in a backyard
Meet Ken. He's 52 and bought $10,000 of shares a few years ago.
A young tree beside the same tree grown much taller
He sells them for $16,000. The $6,000 difference is a capital gain.
A small stream joining a wider river
Capital gains tax isn't a separate tax. His net capital gain is added to his taxable income for the year.
A loaf of bread on a board cut neatly in half
Because he's a resident and held the shares for at least 12 months, only half the gain, $3,000, is added today.
A wheelbarrow of leaves being tipped onto a compost heap for later use
Capital losses can reduce capital gains, but not wages. Unused losses carry forward to later years.
A man in his early fifties with grey stubble filing papers into a timber drawer
Ken keeps records of what he paid, and when, for every investment.

The end

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General advice warning. This picture book is general information only. It does not take into account your objectives, financial situation or needs, and it is not personal advice. Rules and thresholds change. Before acting, consider whether it is right for you, read any relevant Product Disclosure Statement and our Financial Services Guide, and seek personal advice. Past performance is not a reliable indicator of future performance.

Information as at 27 October 2026. Sources:

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