Owning Part of the Company: Investing in Shares
In This Chapter
Understanding shares, dividends and possible deductions
Paying tax on capital gains and losses
W hen you invest in the share market, you’re pinning your hopes for income and capital growth on the business operations of publicly listed companies such as CBA, Qantas and Woolworths. In this chapter, I explain the unique taxation issues associated with this category of investment.
Sharing the Profits: Dividends
When you buy shares in a company, you become a part owner — a shareholder — of the company. This status means you can vote at the annual general meeting and give your two bob’s worth of advice to the company directors. One tangible benefit of being a shareholder is the right to receive a share of the profits, referred to as dividends. Companies ordinarily pay dividends to you twice a year, and dividends are normally liable to tax when they’re paid.