Investment expenses you can claim at tax time

What might be claimable?

In Australia, if you earn income from your investments, like dividends from shares or interest from bonds, you can generally claim a tax deduction for the expenses you incurred to earn that income. These might include:

• Borrowing costs and interest charged on money borrowed to purchase investments,
• Ongoing account-keeping fees on an account held for investment purposes (but note that if you have a joint account, you should only claim your share of the fees),
• The portion of costs you’ve incurred to manage your investments – such as subscriptions to specialist investment journals or share market data services.

What is not claimable?

For any of your investments held on capital account: while it might be tempting to claim everything at tax time, you cannot deduct certain investment-related costs right away (like stamp duty, brokerage fees or the purchase price of your investment). Instead, these expenses are bundled into what's called the cost base of your asset.

Your cost base in a CGT asset is generally what it cost you to buy it, plus other costs you incurred to hold and dispose of it. Your cost base usually comes into play later, such as when you're working out your capital gain after selling your investments.

How to claim

When tax time rolls around, keep your receipts and statements handy; not only will you need them to back up your claims but the ATO has certain requirements about what records you need, the format you need to keep them in and how long to keep them.

Most platforms, like CommSec, let you download a tax summary to make life easier. You (or your accountant) can then plug the relevant deductions into your tax return.

Keep it real

The golden rule: only claim expenses that have a connection with your income-earning activities, and only for the portion that’s investment-related. That means if you have incurred the expense for both private and income-producing purposes, you need to apportion the expense between each purpose. If you’re unsure, chat with a registered tax agent.

This article is intended to provide general information only and does not take into account your individual objectives, financial situation or needs. The above information is not tax advice.

Taxation laws are complex and subject to change. Commonwealth Securities Limited (CommSec) does not provide tax (financial) advice under the Tax Agent Services Act 2009 (Cth). You should consider seeking independent tax advice from a registered tax agent, accountant or adviser before you make any decisions based on this information.

This information is not advice and is general in nature. The information has been prepared without taking account of the objectives , financial situation or needs of any particular individual. For this reason, any individual should, before acting on this information, consider the appropriateness of the information, having regards to the individual's objectives , financial situation or needs, and, if necessary, seek appropriate professional advice. You can view the CommSec Terms and Conditions, Product Disclosure Statements, Best Execution Statement and Financial Services Guide, and should consider them before making any decision about these products and services.

The Academy is intended to provide general information of an educational nature only. Any securities or prices used in the examples given are for illustrative purposes only and should not be considered as a recommendation to buy, sell or hold. Past performance is not indicative of future performance. Investing carries risk.