If you have shares in an Australian Company, and have received dividends, you must claim those dividends as income in your income tax return, which will then be taxed according to your marginal tax rate.
Many companies pay dividends that are fully or partially franked. This means that they have already paid tax on the profits out of which the dividends are being paid, and you as a shareholder get the benefit of the tax that the company has paid.
See the page which explains how online tax returns work and follow the steps to lodge your tax online now.
If your shares rise in value, there is no tax payable
on that increase –
however, if you sell your shares for more than you paid for them, then you are liable for Capital Gains Tax.
– Capital gains tax is the difference between what the shares cost you and what you eventually sold them for. if you have held the shares for more than 12 months, you are entitled to a 50% discount on the gain that you made.
If you sell shares at a loss during the year, the loss is not deductible against your taxable income. It can only be deducted against any capital gains you made in the same year. If you have not made any gains in that year, then those losses are carried forward to be deducted against any future capital gains that you make.
It is important to keep accurate records of your share holding, as sometimes companies have bonus issues, share buy backs, share splits ect, all of which can affect the calculation of any capital gain or loss on the shares.
Visit our How It Works page and follow the steps to lodge your tax online now.