Tax Setup
Before generating tax reports, you need to configure your portfolio's tax settings. These settings determine how Capital Gains Tax (CGT) is calculated and which tax rules apply to your investments.
Why Tax Setup Matters
Different entity types are subject to different tax rules in Australia:
- Individuals receive a 50% CGT discount on assets held longer than 12 months
- Companies pay tax on the full capital gain with no discount
- SMSFs receive a 33.33% CGT discount on assets held longer than 12 months
- Trusts may pass through the 50% discount to individual beneficiaries
The allocation method determines which specific shares are "sold" when you record a SELL transaction, directly impacting your capital gains calculation.
Step 1: Set Your Tax Entity Type
- Navigate to your portfolio page.
- Open Portfolio Settings (gear icon).
- Under Tax Entity Type, select the entity that matches your investment account:
| Entity | When to Use |
|---|---|
| Individual | Personal brokerage accounts, individual share trading |
| Company | Company-held investment accounts |
| Trust | Family trusts, discretionary trusts |
| SMSF | Self-Managed Super Fund investments |
- Click Save.
Changing the entity type recalculates all tax reports retroactively. Verify your Capital Gains Report after making changes.
Step 2: Set Your Allocation Method
The allocation method determines the order in which share lots are sold when you record a SELL transaction.
- In Portfolio Settings, under Allocation Method, select your preferred method:
| Method | Description | Impact |
|---|---|---|
| FIFO | First In, First Out -- sells oldest shares first | Standard method; matches most broker defaults |
| LIFO | Last In, First Out -- sells newest shares first | May reduce gains if recent purchases were at higher prices |
| Maximise Gain | Sells lots producing the largest gain first | Use for specific tax planning (rarely needed) |
| Minimise Gain | Sells lots producing the smallest gain first | Defers gains to future years |
| Minimise CGT | Optimises for lowest Capital Gains Tax | Considers CGT discount; sells long-held lots first when beneficial |
- Click Save.
If you are unsure which method to use, start with FIFO. It is the most widely used and understood method. Speak with your accountant before using other methods, as they can have significant tax implications.
Step 3: Verify Your Configuration
After setting both options:
- Go to Portfolio Settings and confirm the settings are displayed correctly.
- Navigate to the Capital Gains Report to verify calculations look reasonable.
- If you have existing SELL transactions, check that the realised gains match your expectations.
Financial Year
Australian tax reports in Metrifly use the Australian financial year (1 July to 30 June). For example:
- FY2024 covers 1 July 2023 to 30 June 2024
- FY2025 covers 1 July 2024 to 30 June 2025
Reports are generated per financial year. You select the FY when viewing tax reports.
Important Notes
- Tax settings are per portfolio. If you have multiple portfolios, configure each one separately.
- Changes to tax settings apply retroactively to all existing transactions. This means historical tax reports will recalculate.
- Metrifly provides tax reports, not tax advice. Always verify calculations with your accountant or tax professional.
- Tax reports assume Australian tax rules. If you are subject to different tax jurisdictions, consult a professional.
Related Guides
- Capital Gains Report -- Understanding your CGT obligations
- Income Report -- Dividend income and franking credits
- myTax Guide -- How to use Metrifly data in your ATO tax return
- Portfolio Settings -- Full portfolio configuration guide