Profits or returns you make on your investments usually become part of your income for tax purposes.
Australian residents for tax purposes are taxed on their income worldwide, so whether you have investments in Australia or overseas, there are tax implications in acquiring, owning and disposing of them.
Income from investments, both local & foreign, can include:
* Interest from bank accounts & income bonds
* Dividends from shares
* Rental income from investment property
In addition, capital gains taxes may be payable if you make a profit upon the sale of your investment.
Various tax deductions are available, depending on the type of investment. Some examples are listed below.
* Bank accounts and income bonds: bank fees
* Shares / managed funds: management fees, loan interest, etc.
* Property: interest, insurance, repairs, maintenances, council rates, water rates, land taxes, property management fees, advertising fees, depreciation, body corporate fees, etc.
If you receive foreign income that is taxable in Australia and you paid foreign tax on that income, you may be entitled to an Australian foreign income tax offset.