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  • Investment income

    You must declare income you earn from investments in your tax return. Investment income you must declare includes:

    You need to declare investment income regardless of whether it's paid:

    • directly to you
    • through a distribution for a partnership (such as a share club) or trust.

    You can also claim a deduction for expenses you incur in earning interest, dividend or other investment income.

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    If you're an Australian resident and you receive interest, you must declare it as income. Interest income includes:

    • interest you earn from financial institution accounts and term deposits
    • interest you earn from any other source including penalty interest you receive on an investment
    • interest you earn from children's savings accounts, if you    
      • open or operate an account for a child and the funds in the account belong to you
      • spent or use the funds in the account
    • interest we pay or credit to you – for example, interest on early payments, interest on overpayments and delayed refunds
    • life insurance bonuses (you may be entitled to a tax offset equal to 30% of any bonus amounts you include in your income)
    • interest from foreign sources (you can claim a foreign income tax offset for any tax pay on this income).

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    A dividend can be paid to you as money or other property, including shares. If you receive bonus shares instead of money, the company issuing the shares should give you a statement that shows if the bonus shares are a dividend.

    Dividend income is usually paid from a:

    • listed investment company
    • public trading trust
    • corporate unit trust
    • corporate limited partnership (in the form of a distribution).

    Some dividends have imputation or franking credits attached. If you receive franking credits on your dividends, you must declare in your tax return your:

    • franked amount
    • franking credit.

    If a company pays or credits you with dividends that have been franked, you'll generally be entitled to a franking tax offset.

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    You must declare the full amount of any rent and rent-related payments that you receive, or become entitled to, on your tax return.

    These payments include:

    • rental bond money if you become entitled to keep it – for example, because    
      • a tenant defaults on the rent
      • of damage to your rental property requiring repairs
    • an insurance payout to compensate you for lost rent
    • a letting or booking fee
    • a reimbursement or recoupment for deductible expenditure, such as an amount from a tenant to cover the cost of repairing damage to your rental property. (This is where you would include the whole amount you receive from the tenant in your income and claim a deduction for the cost of the repairs)
    • rent you receive from renting out a room or a whole house or unit for a short time basis, through a website or app.

    If you receive goods and services instead of rent, you must work out and declare the monetary value.

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    Only include your share of rent and expenses in your tax return if you:

    • own a rental property jointly or in common with another person
    • have an interest in a partnership that carries on a rental property business.

    Managed investment trusts

    You must show any income or credits you receive from any trust investment product in your tax return. This includes income or credits from a:

    • cash management trust
    • money market trust
    • mortgage trust
    • unit trust
    • managed fund – such as a property trust, share trust, equity trust, growth trust, imputation trust or balanced trust.

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    Capital gains

    You must declare the amount of any capital gain you make when you sell a capital asset, such as an investment property. Generally, your capital gain is the difference between:

    • your asset's cost base (what you paid for it), and
    • your capital proceeds (the amount you receive for it).

    You can also make a capital gain if a managed fund or other unit trust distributes a capital gain to you.

    We treat capital gains as part of your total income, we do not tax them separately.

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    Last modified: 21 May 2021QC 31937