Should You Sell or Hold Your RSUs? Timing & CGT Explained
- Mo Shouman
- 3 days ago
- 4 min read
By Mo, Founder and Principal Adviser – My Wealth Choice, Sydney
Introduction
If you’ve recently had Restricted Stock Units (RSUs) vest, you’re probably asking one of the most common and most financially important questions:
“Should I sell my RSUs now or hold onto them for future growth?”
The right answer depends on your personal goals, tax position, and tolerance for market risk.
At My Wealth Choice, we help Sydney-based professionals navigate this decision by
analysing both capital gains tax (CGT) timing and portfolio risk, ensuring every action aligns with a broader wealth strategy.
Understanding When RSUs Become Yours
RSUs are taxed when they vest, not when they are granted.
Once they vest, the shares are legally yours — and the market value on that day is treated as taxable income.
After that, any increase or decrease in value becomes a capital gain or loss when you sell the shares.
So, your choice to hold or sell after vesting determines whether you face short-term market risk, or benefit from long-term tax savings.
The Case for Selling Your RSUs
For many professionals, selling vested RSUs sooner rather than later makes sense.
1. Managing Concentration Risk
Most RSU holders already depend on their employer for their salary.
If a large percentage of your investments are also tied to that same company, your financial exposure doubles.
Example: If your employer’s share price falls 30%, your job stability and wealth could be
hit simultaneously.
Selling part of your RSU allocation can reduce this “double exposure,” freeing funds to invest across other assets and sectors.
2. Covering the Tax Liability
Because RSUs are taxed as income at vesting, many people sell a portion of their shares immediately to cover the tax bill.
Failing to do so can create cashflow pressure when your next tax return arrives.
3. Rebalancing for Long-Term Goals
Selling some RSUs allows you to rebalance into a portfolio designed for your risk profile — such as diversified managed funds, ETFs, or superannuation investments.
My Wealth Choice insight:
Sometimes we recommend an automatic sell-and-reinvest plan — converting part of each vesting tranche into a diversified portfolio, while holding selected shares for CGT benefits. However, some other approaches come into play depending on our clients’ preferences. We can keep the shares but reduce their tax from 47% to 0%.
The Case for Holding Your RSUs
Holding RSUs after vesting can be rewarding if done strategically.
1. Capital Gains Tax (CGT) Discount
If you hold your shares for more than 12 months after vesting, you may qualify for a 50% CGT discount on any gain.
That means you’re only taxed on half of your profits when you sell.
Example: $40,000 gain after 12 months = $20,000 taxable amount → potential $9,400 tax saving at the top marginal rate.
2. Confidence in Your Employer’s Long-Term Value
If you believe strongly in your company’s future and want to stay invested, holding RSUs allows participation in future share price growth.
3. Staggered Sales for Tax Efficiency
Rather than selling all at once, you can sell in stages across financial years — smoothing out taxable income and maximising use of tax thresholds.
My Wealth Choice insight:
We model scenario-based outcomes using projected share prices and tax brackets, so clients can compare after-tax wealth under different sale timings.
Risks of Holding Too Long
While the CGT discount is attractive, it’s not risk-free.
Delaying sale means exposing yourself to:
Market volatility — share prices can drop unexpectedly.
Behavioural bias — emotional attachment can cloud decision-making.
Liquidity constraints — if you need cash suddenly, waiting for long-term gains may not be feasible.
As advisers, our role is to help you quantify these risks, not just speculate on share price trends.
Timing Strategies to Balance Tax and Risk
At My Wealth Choice, we guide clients through timing frameworks that merge tax efficiency and portfolio discipline:
1. Sell-to-Cover Approach
Sell just enough shares at vesting to pay estimated tax. Keep the rest invested.
2. 50/50 Rule
Sell half immediately, hold half for 12 months to access CGT discount.
3. Goal-Based Diversification
Link RSU proceeds to specific life goals — home purchase, education fund, or long-term super contribution — rather than arbitrary market timing.
4. Tax Year Planning
Consider selling before or after 30 June depending on income levels and CGT
position.
These frameworks aren’t one-size-fits-all; they’re built around individual goals, income,
and tolerance for volatility.
Case Example: Timing in Action
James, a Sydney-based software product manager, had $120,000 in RSUs vest in March 2024.
Rather than selling everything, we implemented a two-stage sale strategy:
Sold 50% immediately to cover tax and reinvest in diversified ETFs.
Held the remaining 50% for 12 months, qualifying for the CGT discount.
By doing so, James saved approximately $7,500 in tax while maintaining diversified
exposure and reduced risk.
How My Wealth Choice Helps You Decide
Our clients trust us to provide clarity in moments where emotion and money intersect.
At My Wealth Choice, we:
Project RSU vesting values and potential tax outcomes.
Analyse holding vs. selling scenarios with after-tax returns.
Integrate RSU proceeds into your broader financial plan.
Liaise with accountants to optimise tax reporting and CGT treatment.
We don’t make speculative market calls — we make structured, data-driven decisions that protect and grow your wealth.
Final Thoughts
The decision to sell or hold RSUs isn’t just about market timing — it’s about aligning your tax, cashflow, and investment strategy with your personal goals.
Done well, RSUs can be one of the most powerful tools in your wealth plan.
Done poorly, they can lead to unnecessary risk and lost tax opportunities.
If you have vested RSUs or an upcoming vesting event, the right advice today can save you significantly tomorrow.
Take Control of Your RSUs
📞 Book your RSU Sale & CGT Strategy Session with Mo at My Wealth Choice to model your timing options, reduce tax, and create a smarter path to wealth.
