Financial Tools
  Client Portfolio Access
  New Client Kit
  Enquiry / Seminar Registration
Hot Issues
Market Update – April 2015
An investor's personal trainer
Budget 2015 - some professional opinions
Australian Government - Budget 2015
What does the ATO want from you?
Making sense of the new excess contribution rules
Greying, working and contributing
Simple-yet-smart investment housekeeping
Market Update – March 2015
Customer-centred innovation underpins high satisfaction among financial advice customers
Two sides to the age profile of SMSF members
Actuaries call for end to superannuation policy tinkering
ATO urges caution on pensions
Market Update - February 2015
Aussie economy shifts gears as structural changes take hold
The catch 22 of retirement savings
Are there reasons to help the tax man do his job?
Some financial terms explained
Small business paradox
Good financial planning finally has a value: 23% more income in retirement
Market Update - January 2015
Articles archive
Quarter 1 January - March 2015
Quarter 4 October - December 2014
Quarter 3 July - September 2014
Quarter 2 April - June 2014
Quarter 1 January - March 2014
Quarter 4 October - December 2013
Quarter 3 July - September 2013
Quarter 2 April - June 2013
Quarter 1 January - March 2013
Quarter 4 October - December 2012
Quarter 3 July - September 2012
Quarter 2 April - June 2012
Quarter 1 January - March 2012
Quarter 4 October - December 2011
Quarter 3 July - September 2011
Quarter 2 April - June 2011
Quarter 1 January - March 2011
Quarter 4 October - December 2010
Quarter 3 July - September 2010
Quarter 2 April - June 2010
Quarter 1 January - March 2010
Quarter 4 October - December 2009
Quarter 3 July - September 2009
Quarter 2 April - June 2009
Quarter 1 January - March 2009
Quarter 4 October - December 2008
Quarter 3 July - September 2008
Quarter 2 April - June 2008
Quarter 1 January - March 2008
Quarter 4 October - December 2007
Quarter 3 July - September 2007
Quarter 2 April - June 2007
Quarter 1 January - March 2007
Quarter 4 October - December 2006
Quarter 3 July - September 2006
Quarter 2 April - June 2006
ATO focuses on novice investors

 

A key part of sound personal finance practice is to ensure you have at least a broad knowledge of ...


... how tax applies to your investments - and to understand the need to gain professional tax advice when necessary.

No doubt, some novice investors would not realise that shares must be held for at least 45 days (not counting the days of acquisition and disposal) to be eligible for franking credits. And some new investors would not know that an asset such as shares or property must be held for at least 12 months to be eligible for discount capital gains tax (CGT).

The list of what investors should understand about tax and their investments includes, of course, their obligations to report income and capital gains in their annual tax returns.

Even investors who rely heavily on professional tax advice should understand how tax impacts on their investments.

It is interesting that the ATO is focusing extra attention this year on novice investors - including those using tax agents.

The tax office is advising tax agents that it is sending letters this month directly to any of their clients who reported rental property or dividend income for the first time last financial year.

As reported in the Weekly Tax Bulletin, published by Thomson Reuters, the ATO letters will direct investors to information about how to avoid common mistakes when preparing their tax returns.

Common tax mistakes of shareholders involve such matters as dividend reinvestment schemes, bonus shares, inherited shares and tax obligations on the disposal of shares.

And common tax mistakes of property investors involve such matters as the difference between repairs and improvements, initial repairs to a newly bought rental property, capital works deductions, interest deductions (when part of a loan is used for private purposes) and private use of rental properties.

Although the tax office is writing to novice investors in this particular compliance exercise, many experienced investors would probably learn valuable lessons from understanding the common tax mistakes made by other investors.

By Robin Bowerman
Smart Investing
Principal & Head of Retail, Vanguard Investments Australia
13th June 2012



23rd-June-2012

  Financial Advisor | Financial Planner | Financial Adviser | Financial Planning | Financial Planner Sydney