You and your shares 2014 (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 2014 (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.
Publications and services
To find out how to get a publication referred to in this guide and for information about our other services, see More information.
What's new this year
Claim only one set of franking credits: don’t engage in dividend washing
The dividend washing integrity rule applies from 1 July 2013. The integrity rule prevents you from claiming franking credits where you have received a dividend as a result of dividend washing.
Dividend washing occurs where you, or an entity connect to you, claim two sets of franking credits by:
- selling shares that are held on the Australian Securities Exchange (ASX) and have become ‘ex-dividend’, and then
- purchasing some substantially identical shares using a special ASX trading market.
The dividend washing integrity rule does not apply if:
- you are an individual, and
- you received no more than $5,000 in franking credits during 2013–14.
However, the dividend washing integrity rule applies where dividends flow indirectly to you through your interest in a trust or partnership.
The Commissioner may also apply the anti-avoidance legislation to deny franking credit benefits to any dividend washing transactions.
See ato.gov.au/dividendwashing for more information.