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Last updated 11 January 2005

This publication is written primarily for people who hold shares or bonds as an investment. While much of the information also applies to people who carry on a business of trading in shares, it does not deal with the specific taxation treatment 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 your professional adviser or the Tax Office.

The publication will help you understand the taxation implications of owning company shares or bonds. It covers how dividends received by Australian resident and non-resident individuals are taxed and the type of expenses that may be claimed as deductions against dividend income. If you acquired shares after 19 September 1985, capital gains tax may apply when you dispose of them. For more information, see the publication Personal investors guide to capital gains tax.

Companies are increasingly borrowing money by issuing debt securities or 'bonds'. These can be bought and sold in the stock market in the same way that shares are. Usually the company pays back the money borrowed after a period of time. Sometimes the investor in a bond is given the right to exchange the bond for shares in the borrowing company or another company. Company bonds that can be exchanged for shares are referred to in this publication as convertible notes.