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If you’ve made a major investment in the last financial year,
any income made from it will need to be included on your tax return.
Any income earned from investments and asses must
be declared in your tax return. This may include amounts from interest, dividends,
rental income, managed investment trust credits, crypto assets and capital
gains. This income needs to be declared whether you receive it directly or
via distributions for a partnership or a trust.
If you, for example, hold the assets that earn the
investment income jointly (with another person), it is assumed that the
asset’s income is divided equally between you, unless it can be proven that
the asset is held in unequal proportions.
Six items must be declared in your tax return as
income this financial year, including the following:
Interest Income
Interest income includes:
· the
interest you earn from financial institution accounts and term deposits
· the
interest you earn from any other source, including penalty interest you
receive on an investment
· the
interest you earn from children’s savings accounts if you
· open or
operate an account for a child and the funds in the account belong to you
· spent or
use the funds in the account
· the
interest we pay or credit to you – for example, interest on early payments,
interest on overpayments and delayed refunds
· life
insurance bonuses (you may be entitled to a tax offset equal to 30% of any
bonus amounts you include in your income)
· interest from
foreign sources (you can claim a foreign income tax offset for any tax paid
on this income).
Dividends
Dividend income may come from a:
· a listed
investment company,
· public
trading trust,
· corporate
unit trust, or a
· corporate
limited partnership (in the form of a distribution).
Some dividends may have imputations or franking
credits attached. The franked amount and the franking credit must be declared
if you receive franking credits on your dividends. If a company pays or
credits you with dividends that have been franked, you’ll generally claim a
franking tax offset.
Rental Property Income
You must declare the full (gross) amount of any
rent and rent-related payments you receive. This includes amounts you receive
from overseas properties. If you receive goods and services instead of rent,
you must work out and declare the monetary value.
To avoid making mistakes involving rental property,
it’s best to consult with a tax adviser. This is usually a major red flag area
for the ATO, so don’t hesitate to ask for help to avoid compliance issues or
declaring for things you shouldn’t.
Managed Investment Trusts
You must show any income or credits you receive
from any trust investment product in your tax return. This includes income or
credits from a:
· cash
management trust
· money
market trust
· mortgage
trust
· unit
trust
· managed
fund – such as a property trust, share trust, equity trust, growth trust,
imputation trust or balanced trust.
Crypto Asset Income
You must declare rewards received for staking
crypto assets (which is often in the form of additional tokens from holding
the original tokens. The money value of the additional tokens needs to be
calculated and then converted into Australian dollars at the time they were
received. These are reported in ‘other income’ in the tax return.
If you receive crypto via air drop, this is income
when you received them based on the money value of the already established
tokens. Occasionally, some crypto projects ‘airdrop’ new tokens to existing
holders to increase the supply. Whatever amount is received needs to be
converted into Australian dollars and declared as other income.
Capital Gains
Any capital gains made when you sell or dispose of
capital assets must be declared. This may include investment property, shares
or crypto assets. The capital gain is the difference between:
· Your
asset’s cost base (what you paid for it)
· Your
capital proceeds (the amount you receive for it)
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