Buying or selling shares? Remember to include details in your Tax Return

Have you bought and sold shares last financial year? Share trading is easier than ever but you still need to include details on your tax return. Talk to us about your shares holdings so we can maximise your return.

With the increased availability of share trading apps, making it cheaper and easier to buy and sell shares, more people are entering into share trading for the first time.

You must declare all income from investments in your tax return, including dividend payments from shares, whether you have traded through a broker, an online platform or a phone app.

Dividend income could be received as bonus shares instead of cash payment, and some dividends have franking credits attached, which may reduce your tax liability.

All payments and credits for dividends and non-cash dividend payments need to be reported. The ATO matches shares data from your tax return to the shares trading details held by the Australian Securities and Investment Commission.

Records for Your Tax Return

You need to include details of all purchases and sales of shares for the financial year – not just payments received.

Each company you buy shares from will issue dividend or distribution statements that provide details of the amount and nature of the payment and whether franking credits apply. If you have not supplied your tax file number to the company, the statement will also show the amount of withholding tax.

Always keep all documents provided by the companies you hold shares with. And remember to keep your shares records for at least five years after you have completed your tax return.

Need Help?

Once you enter the share market, your tax return can become more complex. For example, some shares transactions will result in capital gains tax or a capital loss, affecting your tax return. In addition, certain expenses incurred in earning your dividend income are claimable – but different rules apply to different types of payments and credits.

We’d love to help you streamline your shares information and make sure you are claiming the offsets and expenses you are allowed to claim, to maximise your tax return. Book in a free consultation or second opinion with us!