Many people have invested in shares in recent years as the stockmarket has boomed. But with markets proving extremely volatile, have you decided to get out while the going is good or hang on for the long haul? Here's what you need to know about your tax position if you buy, sell or hold shares.
Income from your shares
The most common way for companies to pay returns to shareholders is by way of a cash dividend.
Significantly, whether you hold shares in a private company or a publicly listed one, the rules about how you're taxed on any dividends are essentially the same.
Dividends are paid outhave already been subject to Australian company tax, which is currently 30% (or 25% for small companies). Recognising that it would be unfair if shareholders were taxed again on the same profits, the tax office gives a rebate for the tax paid by the company on profits distributed as dividends.
