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Tax for Australians for Dummies, 2014 - 15 Edition by Jimmy B. Prince

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Part III

Tax-Effective Investments

tip.tif Five Things to Keep in Mind about Tax and Your Investments

  • Tax must be paid on your investment income. You’re ordinarily liable to pay tax on investment income you derive (such as interest, dividends and rent) in the tax year you receive the payment.
  • If you derive dividends you could qualify for dividend franking credits. If your dividend franking credits exceed the net tax payable, the Tax Office refunds you the difference.
  • There are costs you can claim relating to rental properties. If you derive rental income you can claim certain expenses you incur such as interest to finance the purchase of your rental property.
  • You may be liable to pay CGT if you make a capital gain on disposal of your CGT assets. The amount of tax payable depends on whether you had held the CGT asset for more or fewer than 12 months.
  • Special rules apply to calculate a capital gain or capital loss. You can claim a 50 per cent CGT discount if you sell a CGT asset you had owned for more than 12 months and make a capital gain. But if you sell it within 12 months, the entire gain is liable to tax. If you make a capital loss, it can only be deducted against a capital gain.

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