Things to know
To claim a deduction for dividend expenses, you must have incurred the expenses in earning income included in the Dividends section. Dividend and distributions income are amounts paid or credited to you by Australian companies you held shares in and includes dividends applied under a dividend reinvestment plan or dealt with on your behalf.
If a listed investment company (LIC) pays you a dividend that included a capital gain amount, you can claim a deduction of 50% of the LIC capital gain at this section. The LIC capital gain amount shows separately on your dividend statement.
What you can claim as a dividend deduction
Dividend expenses you can claim a deduction for may include:
- management fees and fees for investment advice relating to changes in the mix of your investments
- interest you paid on money you borrowed to buy shares or similar investments
- costs relating to managing your investments, such as travel and buying specialist investment journals or subscriptions.
For more information on claiming deductions for expenses incurred earning income from shares see You and your shares – deductions from dividend income.
You can also claim 50% of the LIC capital gain, see CGT listed investment companies concession.
If you borrowed money to buy assets for both private use and income-producing investments, you can claim only the portion of the interest expenses relating to the income-producing investments.
Interest you incurred on investments you made using a capital protected borrowing may not be fully deductible. To help determine if you can deduct the full amount, see Capital protected products and borrowings.
You can claim part of the decline in value of your computer using the percentage of your total computer use that related to managing your investments. If you used your computer to manage both your investments to produce interest income and investments in shares or similar securities, then you can claim part of the decline in value related to managing those investments once, in either Interest income deductions or Dividend deductions. Guide to depreciating assets provides more information about claiming a deduction for the decline in value of your computer.
Deductions for some expenses, such as interest and borrowing costs, may be affected by the thin capitalisation rules if they relate to:
- certain overseas investments or
- investments in Australia if you were a foreign resident.
These rules may apply if the total of your debt deductions and those of your associates are over $2 million for 2024–25. For more information about how these rules apply see Thin capitalisation.
What you can't claim as a dividend deduction
You can't claim expenses for:
- financial advice you received from someone who isn't either a:
- tax agent with a current Tax Practitioners Board registration
- qualified tax relevant provider with a current Australian Securities and Investments Commission registration
- some interest expenses where you borrow money under a capital protected product or borrowing
- brokerage fees and other transaction costs.
Don’t show at this section
Don’t show the following expenses at this section:
- Any expenses incurred in earning trust and partnership distributions, go to Partnerships or Trusts
- Expenses incurred in earning foreign source dividends, go to Other foreign income or Other deductions
- Expenses incurred for an investment proposal before the acquisition of an asset unless you were carrying on an investment business, in which case you would claim any expenses at Business income or losses.
Completing this section
You will need evidence of your dividend expenses. This may include receipts for subscriptions and bank statements showing the interest and bank fees you pay. See Deductible expenses.
You'll also need your LIC dividend statement which shows the capital gain amount. Show dividends you received from a LIC in the Dividends section.
We pre-fill your tax return with:
- dividend deductions information you uploaded from myDeductions
- LIC capital gain deduction amount provided to us.
Check them and add any other dividend deductions that haven't pre-filled.
To personalise your tax return to show dividend deductions, at Personalise return, select:
- You had deductions you want to claim
- Gifts, donations, interest, dividends, and the cost of managing your tax affairs
To show your dividend deductions, at Prepare return select 'Add/Edit' at the Deductions banner.
At the Dividend deductions banner:
- For each dividend deduction expense that hasn't pre-filled in your tax return, select Add and enter information into the corresponding fields.
Joint accounts
If you had joint share investments or similar investments, only show your share of the joint expenses. If you held the investment equally with one other person, this will be half. Keep a record of how you worked out your part if you didn’t share the expenses equally.
The Depreciation and capital allowances tool can help you work out any decline in value deduction. It can also work out any deductible balancing adjustment when you stop holding a depreciating asset. Access this tool in the Deductions section.
Fields from this tool can't be adjusted in myTax. To make any adjustments, or to add new assets to the tool, select the 'Use the depreciation and capital allowances tool' link. - Select Save.
- Select Save and continue when you have completed the Deductions section.