TAX023 The tax basics to share investing (547 words)

With many new investors moving away from cash investments to seek greater return, the popularity in direct share investing has never been greater. This article summarises the tax responsibilities of a share investor and highlights some of the risks. A call to action to speak with a qualified adviser is also included.

With many ‘safe’ investments such as term deposits offering very low interest rates, more people are turning to the share market in pursuit of higher returns. For new share investors this means understanding not only the risk profile of share investments, but also the different ways in which the returns on shares are taxed.

Jane is one such investor. Looking for a combination of steady income and the potential for capital growth, she recently purchased a portfolio of shares in major companies with a good history of paying regular dividends. Soon she’ll begin to enjoy receiving dividends and she’s already following the performance of her shares via daily finance reports. But how will her investment income be taxed?