About this guide
This information may not apply to the current year. Check the content carefully to ensure it is applicable to your circumstances.
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You and your shares 2011 (NAT 2632) will help people who hold shares or bonds as an investment to understand their tax obligations. It covers:
- how dividends received by Australian resident and non-resident individuals are taxed, and
- the type of expenses you may be able to claim against dividend income.
If you acquired shares after 19 September 1985, capital gains tax (CGT) may apply when you dispose of them. For more information, see the Personal investors guide to capital gains tax 2011 (NAT 4152).
Who should use this guide?
Use this guide if you are an individual taxpayer who holds shares or bonds as an investment.
This guide will also help people who carry on a business of trading in shares. However, it does not deal with the specific taxation of shares held as trading stock or with the profits or losses arising from the disposal of such shares. If you need further advice on these aspects of owning shares, contact us or a recognised tax adviser.
The new TOFA rules
The Taxation of Financial Arrangements (TOFA) rules generally only apply to individuals who elect for them to apply, or where an financial arrangement (such as a bond) lasts more than 12 months from the time when you start to have it and there is a significant deferral of the income or gain. The TOFA rules are new taxation laws that modernise the taxation of gains and losses from financial arrangements such as company bonds, convertible notes, derivatives, and term deposits.
Generally the TOFA rules will apply to individuals from the 2009-10 income year who elect for this to happen. If you are an individual who has elected for the TOFA rules to apply to your tax affairs, or you have invested in a financial arrangement where there is a significant deferral of income or gain and the bonds last more than 12 months from the time when you start to have it, you will need to complete additional labels on your 2011 tax return.
See Completing the tax return for individuals where the TOFA rules apply. This will help you to complete your 2011 tax return by showing you where to report any TOFA gains and losses from your financial arrangements.
Publications and services
To find out how to get a publication referred to in this guide and for information about our other services, see the inside back cover.