Did you know the tax you pay on your investments can vary depending on how you hold them – whether in your own name, through super, a trust or a company?
How your investments can grow
Investment returns generally come from two sources:
- Income – interest, rent, or dividends.
- Growth – an increase in value, also known as a ‘capital gain’.
Both can attract tax, and the amount you pay depends on the structure used to hold the investment.
Where you ‘hold’ your investment matters
There are four common ways to hold investments in Australia, each with a different tax treatment:
- Your own name: Assets are held personally using your tax file number. Tax is generally paid at your marginal tax rate (up to 45% plus Medicare levy).
- Company: Investments are held through a company structure. Tax is generally paid at a flat rate of 25%-30%.
- Trust: Income is distributed to beneficiaries, who pay tax at their own marginal tax rate.
- Superannuation: Investments are held within your super account and are generally taxed between 0% and 15%.
How investments are taxed
Investment returns are taxed in two ways:
- Income tax – interest, rent or dividends are taxed in the year they are received, at the rate of the structure in which it is held. In your own name it could be as high as 45%, in super it could be as low as 0%. By paying less tax on the same income, you get to keep more of it.
- Capital gains tax (CGT) – when you sell an investment for more than you paid, tax may apply to the gain. Changes from 1 July 2027 may increase some CGT liabilities, making it important to understand how your investments are structured.
