Tax on shares: ATO extends data matching program


The Australian Tax Office (ATO) is utilising data provided by the Australian Investments and Security Commission (ASIC) to data match share trades.

The ATO is
accessing more than 500 million records detailing price, quantity and time of
individual trades dating back to 2014. The information complements information
that the ATO already holds from brokers, share registries and exchanges.

this wealth of information, the ATO will explore what has been reported on tax
returns, specifically, capital gains on the sale or transfer of shares and the
losses claimed.

Given that
more than 5 million Australians now own shares, the ATO is keen to ensure that
errors are minimised.

“Almost one
third of all Australian adults own shares, and there is evidence that some
taxpayers are getting it wrong when it comes to reporting their capital gains
or losses from the sale of shares. In particular, we tend to see higher rates
of error among those who don’t regularly trade in shares and who are not aware
of the tax implications,” Assistant Commissioner Kath Anderson said.

With penalties as high as 75% of the tax shortfall, it is important to ensure that you have your documentation in place for share trades and transfers including records of share purchase and sale prices, as well as costs like brokerage fees. If you sold part of your share holdings, you need to keep records of the parcel you sold and the parcel you are still holding.

If you are concerned about how you are managing tax on your share portfolio and transactions, please give Stephen Maze a call on +61 2 9221 6666 or drop him a line.