How to Declare Shares in Your Tax Return (Australia)

Declaring shares in your tax return is essential for Australian taxpayers who earn income or make capital gains from investments. Whether you’re a beginner investor or a seasoned trader, correctly reporting your shares ensures you stay compliant with the Australian Taxation Office (ATO) and avoid unnecessary penalties.

This article outlines everything you need to know about declaring shares in your Australian tax return, including dividends, capital gains, and record-keeping tips.

1. When Do You Need to Declare Shares?

You need to declare shares in your tax return if you:

• Receive dividends (income from shares)

• Sell shares and make a capital gain or loss

• Participate in events like share buybacks, stock splits, or bonus issues

Even if you haven’t sold any shares, dividends still count as taxable income.

2. Declaring Dividend Income

a. Where to Declare

Dividend income is reported under the “Income” section of your individual tax return, typically at Item 11 – Dividends.

b. Types of Dividends

• Franked dividends: These include a franking credit, representing tax already paid by the company.

• Unfranked dividends: No tax has been paid at the company level.

c. What You Need

Keep statements from each company that paid you dividends. Each dividend statement will show:

• Payment amount

• Franking credit

• Payment date

• Shareholder details

You must report both the cash dividend and the franking credit, as the credit will count toward your tax offset.

3. Declaring Capital Gains or Losses

If you sold shares during the financial year (1 July – 30 June), you may have made a capital gain or capital loss.

a. Where to Declare

Capital gains or losses are reported under Item 18 – Capital Gains in your tax return.

b. How to Calculate Capital Gains

A capital gain = Sale price – Purchase price (including brokerage fees)

You may be eligible for a 50% CGT discount if you held the shares for more than 12 months before selling.

If you made a capital loss, you can’t use it to offset other income, but you can carry it forward to offset future capital gains.

4. Record-Keeping Requirements

To declare your shares accurately, keep records of:

• Purchase and sale contracts

• Dividend statements

• DRP (Dividend Reinvestment Plan) details

• Corporate actions (e.g., stock splits)

• Brokerage fees and charges

You should retain these documents for at least 5 years after lodging your tax return.

5. Using ATO Pre-Fill and myTax

If you’re using myTax or a registered tax agent, much of your dividend income may already be pre-filled by the ATO. However, it’s your responsibility to:

• Verify the information

• Add missing income or sales

• Correct any errors

6. Common Mistakes to Avoid

• Forgetting to include DRP shares in your cost base

• Not reporting capital losses correctly

• Failing to declare foreign dividends

• Relying solely on ATO pre-fill without cross-checking

7. Getting Help

If you’re unsure about how to declare your shares:

• Speak with a registered tax agent

• Use the ATO’s Capital Gains Tax Record Keeping Tool

• Refer to ATO guides on CGT and dividends

Final Thoughts

Declaring shares in your Australian tax return may seem complex at first, but with proper records and understanding of the rules, it becomes manageable. Being accurate and transparent with your share investments not only keeps you compliant but may also result in tax savings through credits and deductions.