I’m moving overseas for good — do I have to sell my Australian shares before I go?

The job overseas starts in February. The apartment in Sydney is staying, with an agent to manage it. The share portfolio has been sitting there for eight years, doing nothing much and doing it well. Someone at dinner says you should sell everything before you leave, someone else says you should sell nothing, and neither of them explains why.

The rule underneath the argument is one most people have never heard of, and it doesn’t care whether you sell. When you stop being an Australian resident for tax purposes, you are taken to have disposed of each of your CGT assets that are not taxable Australian property, for their market value at the time you stopped being a resident. The ATO calls it deemed disposal. Nothing is sold, no money moves, and a capital gain can still land in that year’s return.

Which assets go, and which stay

The dividing line is a defined term: taxable Australian property. It covers Australian real property — a house, an apartment, a commercial building or land — an indirect interest in Australian real property, a mining, quarrying or prospecting right in Australia, a CGT asset used to carry on a business through a permanent establishment here, and an option or right over any of those.

Those assets are not deemed to be disposed of when you leave, for a straightforward reason: foreign and temporary residents are subject to CGT on taxable Australian property anyway, so Australia doesn’t need to settle up with you on the way out. The apartment stays inside the Australian net whenever you eventually sell it.

Everything else is on the other side of the line. Listed shares, managed funds and ETFs, crypto assets, an overseas property — these are the assets the deemed disposal reaches. One qualification for anyone with a substantial stake in a property-heavy company or trust: if you hold indirect Australian real property interests, or options or rights to acquire them, you are taken to have immediately re-acquired those at market value.

Temporary residents are outside all of this. The ATO’s position is plain — if you are a temporary resident when you stop being an Australian resident, you are not taken to have disposed of any of your assets. A separate rule runs the other way for people whose visa status changes while they stay: if you stop being a temporary resident and remain an Australian resident, you are taken to have acquired your non-taxable-Australian-property assets at market value at that time, with employee share scheme shares and rights excluded.

The choice that switches it off

An individual can choose to disregard all capital gains and losses arising from the deemed disposal. It is all or nothing across the assets affected — not a menu you pick winners from.

If you make that choice, those assets are taken to be taxable Australian property until the earlier of two things: a CGT event happening to them, such as a sale, or you again becoming an Australian resident. The effect is that the movement in value after you leave is brought into the eventual calculation. You don’t need to tell the ATO what you decided; the way you prepare your tax return is generally sufficient evidence of the choice.

Described that way it sounds like a deferral with no downside, and that is the part worth slowing down on. Choosing to disregard keeps the assets inside the Australian CGT system for as long as you hold them, including through years when you have no other connection to Australia. It also hands the outcome to the market: if the portfolio doubles while you are away, the gain taxed here is the larger one.

The discount is the part people miss

The 50% CGT discount behaves differently on each side of the decision, and this is usually where the real money is.

On the deemed disposal itself, you can claim the full 50% discount on assets that are not taxable Australian property if you have always been an Australian resident while owning the asset. The gain is crystallised while you are still a resident, and it keeps the discount a resident gets.

After you leave, the discount narrows. Where you stop being an Australian resident, the full CGT discount is not available on an asset acquired after 8 May 2012 and sold once you are a foreign resident. An apportioned discount may apply, covering the part of the ownership period during which you were an Australian resident. So the same gain can be discounted in full if it is realised by the deemed disposal, and only partly if the choice pushes it into a sale made years later from overseas.

There is a mirror image of this worth knowing if you may come back. A capital loss is deemed too. If the portfolio is under water on the day you cease residency, the deemed disposal crystallises capital losses — and a capital loss can’t be deducted from salary or other income, only offset against capital gains in the same year or carried forward, with no time limit on how long it can be carried.

Two things that are assumed and shouldn’t be

The first is that no sale means nothing to report. A deemed disposal is a CGT event like any other, and the gain belongs to the year you stopped being a resident. The awkward feature is the one the name gives away: there are no sale proceeds to pay the tax with. Where a large unrealised gain is sitting in the portfolio, when the departure date falls and how the position is arranged around it are worth thinking about well before the flight, not in the following July.

The second is that the date is a matter of paperwork. Whether you have stopped being an Australian resident for tax purposes is decided by the residency tests — whether you reside here, and the domicile, 183-day and superannuation tests — not by the date on a visa, a flight, or a form. Leaving on a two-year posting with a house, a family and a return ticket is a genuinely different case from emigrating, and getting this wrong changes everything downstream of it.

One timing note for anyone whose move is a year or more away. From 1 July 2027 the 50% discount is replaced for individuals by cost base indexation plus a 30% minimum tax rate on real gains accruing from that date, under the Tax Reform No. 1 Acts of 2026, with assets you already own split into a pre- and post-1 July 2027 leg. A deemed disposal on departure is a CGT event, so which side of that date it falls on is part of the picture — our earlier piece on the two-part calculation sets out how the split works.

This is general information current as at 21 September 2026, drawn from the ATO’s guidance on how changing residency affects CGT (last updated 22 June 2026), not advice about anyone’s departure. What it should not be read as is a reason to sell, or a reason not to: the rule decides how a gain is measured, not whether an investment is worth keeping.

Three of our other pieces cover ground next door to this one: the main residence exemption when you sell an Australian home as a foreign resident, the foreign resident CGT changes that start on 1 October 2026, and capital gains tax on shares and crypto when nothing has been cashed out. Individual tax returns and property investor tax are two of our four service areas, and the income tax calculator here can show what the year of departure looks like on the income side.