ato logo

Owning shares

Find out about owning shares, including dividends and deductions you can claim.

Last updated 29 June 2023

When you own shares

When you own shares, there are tax implications from:

If you receive a retail premium for rights or entitlements that you didn't take up, you need to declare these premiums as capital gains on your tax return for the year.

Dividends from shares

You need to declare all your dividend income on your tax return, even if you use your dividend to purchase more shares – for example, through a dividend reinvestment plan.

A dividend is assessable income in the year it was paid or credited to you. Your dividend statement shows the relevant date – often referred to as the payment date or date paid.

Reinvesting dividends

Most dividends you are paid or credited will be in the form of money, either by cheque or directly deposited into a bank account. However, the company may give you the option of reinvesting your dividends in the form of new shares in the company – this is called a dividend reinvestment scheme. If you take this option, you must pay tax on your reinvested dividends. The amount of the dividend received will form part of the cost base of the shares you receive.

Keep a record of your reinvested dividends to help you work out any capital gains or capital losses you make when you dispose of the shares.

Deductions when you own shares

When you own shares, you may be able to claim a deduction for expenses you incur, including:

  • management fees
  • specialist journals
  • interest on money you borrowed to buy the shares.

If your child is under 18 years old and they buy shares, find out about quoting a TFN and declaring dividends.

Individuals may be eligible for a refund of excess franking credits and there are different ways to apply for a refund.

If you receive retail premiums as a shareholder, check how the retail premium is taxed.