Shares and Investing Tax in Australia: What You Need to Know
Updated: Sep 30
Investing in shares is one of the most effective ways to build wealth. But many investors misunderstand how tax applies.
If you get it wrong, you either overpay or risk penalties.
How Shares Are Taxed
There are two main tax components:
1. Capital Gains Tax
You pay CGT when you sell shares at a profit.
Held over 12 months → 50% discount applies
Held under 12 months → full gain is taxable
(This may or may not change under the new proposed laws )
2. Dividends and Franking Credits
Dividends are taxable income.
Franking credits:
Represent tax already paid by the company
Can reduce your tax or create a refund
Common Mistakes
Ignoring small trades
Not tracking cost base properly
Missing dividend income
Incorrect CGT discount calculations
What the ATO Sees
The ATO receives data directly from:
Share registries
Brokers
Managed funds
If you do not declare it, they already know.
How to Reduce Tax on Shares
Hold shares longer than 12 months
Offset gains with losses
Use lower income years to sell
Structure investments correctly
Final Word
Share investing tax is simple if done correctly. Complex if ignored.
We simplify investment tax so you keep more of your returns.
Disclaimer: The information provided in this article is general in nature and does not constitute personal financial, legal or tax advice. All content relates to the current financial year only. Future changes to tax laws, thresholds or administrative requirements may affect the accuracy or relevance of this information, so you should always confirm that the guidance remains current. While every effort has been made to ensure accuracy at the time of publication, Dolman Bateman accepts no responsibility or liability for any loss or damage arising from reliance on this information. You should seek professional advice tailored to your circumstances before making any financial or tax decision.
