Shareholder duties explained

Once you have purchased shares, there are a number of steps you need to take to make sure your portfolio doesn’t attract unnecessary tax or administration.

Lodgement of Tax File Numbers (TFN)

As a shareholder you may be eligible to receive dividends. Companies will request that you provide your TFN to avoid having tax withheld against your dividend.

You can provide your TFN directly to the company through the TFN or ABN notification form.

Dividend direction (banking) instructions

Companies will request that you provide banking details so they can then electronically credit any dividends you are eligible for directly to your bank account.

Election of Dividend Re-Investment Plan (DRP)

Some companies offer a dividend re-investment plan so that your dividends can be re-invested as shares at a pre-determined price.

When a company offers a DRP, you will receive a DRP application form, which will need to be completed and returned to the company.

The issue of shares in lieu of a cash payment is taxable and you should retain any dividend statements for tax purposes.

Company annual reports

As a shareholder you are entitled to receive an annual report. Most companies offer the option to receive the annual report either in electronic or in printed format.

US income administration

If you buy shares in a company that is listed on a stock exchange in the US or buy exchange traded funds (ETFs) which hold a basket of companies listed on a stock exchange in the US, you will be required to complete a W-8BEN form.

If you do not complete the form, you may be subject to US Treasury Withholding Tax on investments.

The information on taxation is of a general nature only and is based on the continuation of present taxation laws, rulings and their interpretation. As individual circumstances differ, you should seek assistance from your taxation adviser.