- Tax deductions. Investors can claim tax deductions on various investment-related costs, including interest on borrowed funds, borrowing costs incurred in arranging finance, bank charges for bank accounts managing investment income, management fees, home office costs, subscriptions to investment-related journals, obtaining tax advice, and travel costs associated with investments.
- Sales income. Capital gains tax is charged for the sale of investments including shares held for long-term gain. If investments are retained for more than 12 months, you have access to a 50% discount. Interest or dividends earned from those assets are taxed as ordinary income.
- Dividend reinvestment plans. Dividends are included in your assessable income for tax purposes even though you never saw any cash.
- Credit refunds. If you have less than $18,200 taxable income and you receive franked dividends, you can claim a refund of the franking credits paid on the dividends you received.
- Foreign income. Income from foreign investment assets is still taxable in Australia. However, you may be entitled to a credit against your Australian tax for any foreign tax paid.
- Losses. Annual income losses due to negative gearing can be offset against annual income.
Tax tips on running investment portfolios
Published 21 Oct, 2016