Australia: My Experience With The Stock Market - Part 1
Before you get excited, you have to understand the tax implications first. It is pretty much different in the Philippines which is in a way like final tax - it is deducted right away upon selling the shares. It took me awhile to comprehend this 😆 but you can refer to this topic - CAPITAL GAINS TAX.
Capital gains tax in Australia is not a separate tax; it will be added to taxable income and taxed at marginal rate. Hence, there is no capital gains tax rate unlike in the Philippines.
Any capital losses can't be claimed against your other income but you can use it to reduce a capital gain. If there's no capital gain, the net capital losses are carried forward to later income years where you can offset it.
I think what is advantageous here especially when you are in the long-term is the 50% discount you can avail if you've held the asset for more than 12 months. BUT....
Share Trading as Investment or Business
Tax implications are different if you are classified as a 'trader' or an 'investor'.
- nature of the activities particularly whether they have the purpose of profit making from buying and selling the shares. You should be able to show your intention with a business plan showing how you analyse and base your decisions on when to buy, hold and sell the shares.
- repetition, volume and regularity of the activities
- organisation in a business-like way including keeping accounts and records of trading stock, business premises, licences or qualifications, a registered business and an ABN.
- amount of capital invested
Disclaimer: We do not provide tax or accounting advice. This material has been prepared for informational purposes only and is not intended to provide, and should not be relied on for tax or accounting advice. You should consult your own tax and accounting advisors before engaging in any transaction.