CGT-Aware Portfolio Rebalancing for Australian Investors
Most portfolio trackers tell you what to rebalance. Crowdfolio tells you how to rebalance without blowing your capital gains tax bill — choosing which specific parcels to sell to minimise your CGT liability.
What is CGT-aware rebalancing?
Standard portfolio rebalancing simply compares your current allocation to your target and tells you to buy or sell enough to close the gap. CGT-aware rebalancing goes one step further: before recommending a sell, it models the tax cost of each available parcel and prioritises the ones that generate the smallest capital gain — or a capital loss that can offset other gains.
For Australian investors, this matters because:
- Selling a parcel held less than 12 months incurs CGT at your full marginal rate
- Selling a parcel held 12+ months qualifies for the 50% CGT discount
- Selling a loss-making parcel can offset gains elsewhere in your portfolio
- From 1 July 2027, the 50% discount is proposed to be replaced by inflation indexing
How Crowdfolio handles it
Crowdfolio logs every parcel you’ve ever bought across all accounts. Hit rebalance and it gets to work:
- Drift detection: compares your current allocation to your model portfolio and identifies which positions are over/under weight.
- Sell candidate ranking: for each over-weight holding, ranks your parcels by estimated CGT cost (ascending).
- Rebalance plan: generates a specific buy/sell plan showing units to trade, which parcel, and estimated CGT per trade.
- 2027 scenario: shows the CGT difference if you execute trades before vs after 1 July 2027.
Supported tax lot methods
- FIFO (First In, First Out) — oldest parcels sold first
- LIFO (Last In, First Out) — newest parcels sold first
- Specific parcel selection — choose exactly which parcel to assign to each sale
- CGT-optimised — Crowdfolio selects the method that minimises your CGT for each trade
Frequently asked questions
What is CGT-aware portfolio rebalancing?
CGT-aware rebalancing means choosing which holdings to sell during rebalancing to minimise your capital gains tax liability — not just target weight deviation. It accounts for the tax cost of selling each lot before recommending a trade.
How is Crowdfolio different from Sharesight for rebalancing?
Sharesight is primarily a portfolio performance and tax reporting tool. Crowdfolio adds portfolio drift detection and CGT-aware rebalancing recommendations — helping you decide when and how much to trade, not just tracking what you’ve already done.
Does Crowdfolio use FIFO, LIFO, or specific parcel selection?
Crowdfolio supports FIFO, LIFO, and manual specific parcel selection. The rebalancing engine defaults to the method that minimises CGT for each sell recommendation.
Start rebalancing CGT-smart
Connect your broker, import your parcels, and run your first CGT-aware rebalance in under 5 minutes. Free to get started.
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