How are shares taxed in Australia?

How are shares taxed in Australia?

Investing in shares doesn’t just invlolve buying and selling, it also has tax consqeuences. In Australia, there are two main types of tax that share investors need to be aware of. Captial gains tax (CGT) and tax on dividends.

When you sell shares for more than you paid, the profit is a capital gain, aand it’s generally taxable. If you held the shares for more than 12 months, you may be entitled to a 50% discount on the gain before tax is applied. If you sell for less thaan you paid, you make a capital loss which may offeset other gains.

Dividends are also taxable, but many Australian companies attaach franking credits to them. These credits represent tax the company has already paid and they reduce the amoutn of tax you owe on your dividend. For some investors, this can even result in a tax refund.

Tax rules an change, investors should keep records of their trades and dividends. Seek profesional advice from an accountant or tax advisor for specific, personal guidance. This article only provides general information and should not be taken as tax advice.