dividend deductions
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Dividend Deductions

Australia has one of the highest proportions of share ownership in the world with more than 6.48 million Australians (or 36% of the adult Australian population), invested in the Australian share market. These investments are either made directly via shares or other listed investments, and/or indirectly via unlisted managed funds. In addition, the majority of Australians with superannuation interests will have some of those superannuation funds invested in the Australian share market.

Australian investors love high-yielding dividend shares as they provide reliable income and the potential for capital gains over time. Many dividends are fully franked so this means investors receive a credit for the tax already paid by the company and then are only required to pay any ‘extra’ tax to match their individual tax obligations.

The following expenses are generally deductible against dividend income:

  • Interest and borrowing costs on loans where the borrowed funds are used to buy shares.
  • Ongoing management fees paid to financial planners, stock brokers, and investment managers.
  • Travel expenses for going to visit investment managers, attend company meetings, etc.
  • Investment journals, subscriptions, and training.
  • Computer depreciation and software programmes.
  • Telephone, internet and home office running costs.
  • Home office furniture depreciation.