Oz, it depends if you're a trader or holder/investor (see ATO opinion below) and you can carry-out both operations (although some accountants have argued otherwise)in the same financial year as long as you keep both totally seperate and well documented ...
Carrying on a business of share trading The difference between a ‘share trader’ and a ‘share holder’ The way in which income and expenditure are dealt with in relation to shares varies depending on whether you are a share trader or a share holder.
While the Tax Office considers each case on its individual features, in summary a share trader is a person who carries out business activities for the purpose of earning income from buying and selling shares. This person's position may be briefly summarised as:
receipts from the sale of shares constitute income purchased shares would be regarded as trading stock the nature, regularity, volume and repetition of the share activity costs incurred in buying or selling shares are an allowable deduction in the year in which they are incurred, and dividends and other similar receipts are included in assessable income. A share holder is a person who holds shares for the purpose of earning income from dividends and similar receipts. This person's position may be briefly summarised as:
the cost of purchase of shares is not an allowable deduction, but is a capital cost receipts from the sale of shares are not assessable income – however any net profit is subject to capital gains tax a net loss from sale of shares may not be offset against income from other sources, but may be carried forward to offset against future capital gains made from the sale of shares costs incurred in buying or selling shares are not an allowable deduction in the year in which they are incurred, but are taken into account in determining the amount of any capital gain dividends and other similar receipts are included in assessable income, and costs (such as interest on borrowed money) incurred in earning dividend income are an allowable deduction at the time they are incurred.
