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I am thinking about depositing some of my money (500-800 AUD) into eToro and buy some shares, just for building good money habits. But I am unfamiliar with the tax implications that I have to face (if I were to close my position).

What should I know in terms of taxation before I deposit my money? Do I have to pay tax on every capital gain I make? Can anyone suggests some good resources and answers to the questions?

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See the information provided by the Australian Taxation Office.

If you sold assets during the year, such as property or shares, you need to work out your capital gain or loss for each asset. You pay tax on your net capital gains.

When you sell or otherwise dispose of an asset, you can reduce your capital gain by 50%, if both of the following apply:

  • you owned the asset for at least 12 months
  • you are an Australian resident for tax purposes
  • This is called the capital gains tax (CGT) discount
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  • Hi Mr Baerker thanks for the link. So even if made $1 net capital gain, I still have to pay taxes on it? Nov 30 '21 at 15:13
  • I'm a Yankee so I have no clue what the criteria are for Australia. Here, whether you would have to pay taxes on it would depend on your overall income. Check with an accountant or do some googling about Aussie tax returns. Nov 30 '21 at 16:18
  • @AliceRathbone, if you are trading shares then you need to calculate the capital gains or losses and enter the amount in your Tax Return at Item 18. If you are trading foreign currency or CFDs or something similar, you would not enter any income from profits at Item 18, you would enter any gains at Other Income and any losses at Other Expenses. If your total income is below $18,200 and you have not paid any tax during the Tax Year, then you do not have to file a Tax Return for the Tax Year.
    – Victor
    Dec 1 '21 at 6:44
  • @Victor Hey Victor thanks for the detailed comment! I have never had a job before, so I have never filed a tax return before. So given that my total income is below $18,200, any net capital gains I made would not be taxed? Dec 2 '21 at 9:47
  • @Victor Do you mind sharing your personal experiences around that? Like when you first got taxed? I am 18, so I am new to this/ Dec 2 '21 at 9:49

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