Management fees
Where you pay ongoing management fees or retainers to investment advisers, you'll be able to claim the expenditure as an allowable deduction. You can only claim a proportion of the fee if the advice covers non-investment matters or relates in part to investments that don't produce assessable income. You can't claim a deduction for a fee paid for drawing up an initial investment plan.
Interest
If you borrow money to buy shares, you'll be able to claim a deduction for the interest you incur on the loan, provided it's reasonable to expect that the dividends you derive from your investment in the shares will produce assessable income. If you also use the loan for private purposes, you'll only be able to claim interest on the part of the loan used to acquire the shares.
Interest on capital protected borrowings
Under a capital protected borrowing arrangement, you acquire listed shares, units or stapled securities using a borrowing that wholly or partly protects you against a fall in their market value.
You can't deduct the interest attributable to capital protection under a capital protected borrowing arrangement for shares, units or stapled securities you enter into or extend, on or after 1 July 2007. You treat the interest as if it were a payment for a put option. This treatment applies to shares, units or stapled securities you hold on capital account for investment purposes.
You work out the amount of interest that is reasonably attributable to the capital protection using the methodology applicable to the type of capital protected borrowing.
Travel expenses
You may be able to claim a deduction for travel expenses where you need to travel to service your investment portfolio – for example, to consult with a broker or to attend a stock exchange or company meeting. You can claim a deduction for the full amount of your expenses where the sole purpose of the travel relates to the share investment. Where the travel is predominantly of a private nature, only the expenses that relate directly to servicing your portfolio will be allowable.
Cost of journals and publications
You may be able to claim the cost of purchasing specialist investment journals and other publications, subscriptions or share market information services that you use to manage your share portfolio. See Taxation Determination TD 2004/1 Income tax: are the costs of subscriptions to share market information services and investment journals deductible under section 8-1 of the Income Tax Assessment Act 1997?
Internet access and computers
You may be able to claim some of the cost of internet access in managing your portfolio. For example, if you use an internet broker to buy and sell shares, the cost of internet access will be deductible to the extent you use the internet for this purpose. You can't claim a deduction for the private use portion.
You can also claim a capital allowance (previously known as depreciation) for the decline in value of your computer equipment to the extent that it's been used for income-producing purposes. You can't claim a capital allowance for the private use portion.
Borrowing expenses
You may be able to claim expenses you incur directly in taking out a loan for purchasing shares that can reasonably be expected to produce assessable dividend income. The expenses may include establishment fees, legal expenses and stamp duty on the loan. If you incur deductible expenses of this kind totalling more than $100, you apportion them over 5 years or the term of the loan, whichever is less. If your expenses are $100 or less, they are fully deductible in the year you incur them.
Dividends that include listed investment company capital gain amounts
If a listed investment company (LIC) pays a dividend to you that includes a LIC capital gain amount, you may be entitled to an income tax deduction.
You can claim a deduction if the following applies:
- you're an individual
- you're an Australian resident when a LIC pays you a dividend
- the dividend is paid to you after 1 July 2001
- the dividend includes a LIC capital gain amount and the capital gain is from a CGT event happening to a CGT asset owned by the LIC for at least 12 months.
The amount of the deduction is 50% of the LIC capital gain amount. The LIC capital gain amount is shown separately on your dividend statement.
You don't show the LIC capital gain amount in your tax return.
Example 8: completion of tax return
Ben, an Australian resident, is a shareholder in XYZ Ltd, a listed investment company. For the 2024–25 income year, Ben receives a fully franked dividend from XYZ Ltd of $70,000 including a LIC capital gain amount of $50,000. Ben includes the following amounts in his tax return: :
- Franked dividend = $70,000
- Franking credit = $30,000
- Assessable income = $100,000
- Deduction for LIC capital gain (shown as deduction ) = $(25,000)
- Net assessable income = $75,000
Other deductions
Any other expenses you incur directly relating to maintaining your portfolio, such as bookkeeping expenses and postage, are also deductible.
Deductions denominated in a foreign currency
You must translate all deductions into Australian dollars that are denominated in a foreign currency before claiming them in your Australian tax return. For more information on the exchange rates you should use in translating foreign currency deductions, see:
Expenses that are not deductible
Unless you're carrying on a business of share trading, you can't claim a deduction for the cost of acquiring shares (for example, expenses for brokerage and stamp duty). These will form part of the cost base for CGT purposes when you dispose of the shares. Unless you're carrying on a business of share trading, you can't claim a deduction for a loss on the disposal of shares. The loss is a capital loss for CGT purposes. For more information, see Personal investors guide to capital gains tax 2025.
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