How to get shares right this tax time

The list of common mistakes and expert tips will help tax professionals reduce the need for amendments later on said the Tax Office.

Firstly, the ATO recommends that tax professionals wait until prefilling is available as some investments take longer than others. Once it that process is complete, check to ensure the investment is listed. If it’s not, add it in.

The ATO guidance recommends that even if an investment is automatically reinvested into a reinvestment plan, dividends and distributions need to still be reported as income.

Capital gains tax events can be driven by actions a company takes, not just what clients do, such as liquidations, mergers, demergers or return of capital.

Reporting capital losses on tax returns is important so they can be easily carried forward to offset future capital gains.

Tax professionals should always ask clients if they had acquired any investments throughout the financial year. They should also be aware of any investments (including gifts) that have been disposed of through the financial year and ensure they have records of the transactions to substantiate any claims.

A fact sheet is available for download at capital gains tax (CGT) on the sale of shares or units to share with clients.