Micro-investing returns are taxable in Australia. Even small amounts from Raiz, Spaceship, or CommSec Pocket must be declared in your annual tax return. Understanding what to report — and what your platform provides — helps ensure you meet your ATO obligations.
Are Micro-Investing Returns Taxable?
Yes — the ATO treats returns from micro-investing the same as any other investment:
- Distributions (income): Taxed as income in the year received
- Capital gains (on withdrawals): Taxed in the year you withdraw and realise a gain
- No special tax treatment: Micro-investing platforms don’t receive any favourable tax status
What Your Platform Provides
Micro-investing platforms are required to provide an annual tax statement after 30 June each year:
| Platform | When available | What is included |
|---|---|---|
| Raiz | Typically July–August | Distributions, capital gains/losses, tax file number withheld tax |
| Spaceship | Typically July–August | Distributions, capital gains/losses |
| CommSec Pocket | Typically July–August | Dividends, capital gains/losses, tax statement |
These statements include all the information needed for your tax return. Do not discard or ignore them — the ATO receives copies too (via automatic data sharing).
Two Types of Taxable Income
1. Distributions (investment income)
The ETFs held within your micro-investing portfolio distribute income — dividends from underlying shares, interest from bonds, and other income. Your platform collects this income and passes it through to you as a distribution.
This income is reported as “Other income” (not salary/wages) in your tax return.
Franking credits: If distributions include franked dividends, franking credits will appear on your tax statement. These offset your tax liability — include them in your return.
2. Capital gains and losses on withdrawal
When you withdraw money from a micro-investing account, the platform sells units in your portfolio. If those units have increased in value since purchase:
- A capital gain arises: Taxable in the year of the withdrawal
- CGT discount: If units were held for 12+ months before sale, the gain is discounted by 50%
If the portfolio has declined, a capital loss arises — offset against current or future capital gains (not against ordinary income).
Reporting Micro-Investing on Your Tax Return
Using myTax (individual lodgement via ATO website)
Many micro-investing distributions are pre-filled by the ATO from data provided by platforms. However:
- Pre-fill is not always complete or accurate — cross-check against your platform’s tax statement
- Capital gains from withdrawals may need to be entered manually
- Franking credits must be included to receive the benefit
Key fields in myTax
- Interest and dividends: Distribution income from the platform
- Managed investment trust income: Some platforms report under this category
- Capital gains: CGT from withdrawals — use the capital gains schedule if total gains exceed $10,000, or summarise in the main return otherwise
When You Didn’t Provide Your TFN
If you registered for a micro-investing account without providing your Tax File Number, the platform is required to withhold tax from your distributions at the highest marginal rate (currently 47% + 2% Medicare = 49%).
This withheld amount appears on your tax statement. Include it in your return — if your actual tax rate is lower than 49%, you will receive a refund.
Tax and the 12-Month CGT Discount
The timing of withdrawals matters for tax:
- Withdraw within 12 months of first investing → full capital gain taxed at marginal rate
- Withdraw after 12+ months → 50% CGT discount applies (for individuals)
Example: $2,000 gain on units held for 14 months:
- Taxable capital gain: $1,000 (after 50% discount)
- At 32.5% marginal rate: $325 in capital gains tax
This is why long-term holding reduces the tax cost of micro-investing gains.
Record Keeping
Keep the following records:
- Annual tax statements from your platform (download and store each year)
- Records of all deposits and withdrawals (your platform’s transaction history)
- Records of any TFN submission dates
The ATO requires investment records to be kept for 5 years after lodgement of the relevant tax return.
Related Articles
- How Micro-Investing Works Australia
- Micro-Investing for Beginners Australia
- Capital Gains Tax Australia
- Franking Credits Australia
- Micro-Investing hub
Frequently Asked Questions
Do I have to declare Raiz income on my tax return? Yes — all distributions and capital gains from Raiz must be declared in your annual tax return. Raiz provides an annual tax statement after 30 June with the relevant figures. The ATO also receives this data directly from Raiz, so not declaring it can trigger a review.
What if my micro-investing account made a loss? A capital loss from selling units at a loss can be used to offset capital gains in the same or future years. You cannot offset capital losses against ordinary income (wages, salary). Report the capital loss in your tax return even if it has no immediate effect — it carries forward to reduce future capital gains.
Does micro-investing affect Centrelink or Medicare? Distributions from micro-investing count as income for means-testing purposes and may affect Centrelink payment eligibility. Capital gains may also affect adjusted taxable income, which can impact Medicare levy surcharge calculations and private health insurance rebate eligibility. Speak with a financial adviser or Centrelink if this is relevant to your situation.
This article provides general financial information only. Tax laws are subject to change — always refer to the ATO (ato.gov.au) for current rules or speak with a registered tax agent. For investment advice, speak with a licensed financial adviser through the ASIC financial advisers register or MoneySmart.