What to Know About Taxes and Investment

What to Know About Taxes and Investment

When it comes to investing, understanding the tax implications of different strategies is crucial for maximising returns and making informed decisions.

Capital growth investments and income investments have significant differences when it comes to your tax preparation. In order to make the right decisions for your portfolio, it is important to understand the tax differences between these two approaches to investing.

Capital Growth Investments and Tax

With capital growth investments, such as stocks, real estate or other assets, the aim is to see an increase in the asset’s value over time. When it comes to taxation, capital gains tax (CGT) is usually applicable when selling these assets that have appreciated in value. 

If an asset is sold at a higher value than it was purchased at, it must be lodged as a capital gain; if it is sold at a lower value than it was purchased at, it can be lodged as a capital loss.

The capital gains tax rate may vary based on factors such as the holding period and the individual’s tax bracket. While capital growth investments can offer substantial returns, they are subject to potential fluctuations and uncertainty.

What Are Income Investments?

Income investments, such as private debt, offer an alternative investment approach that focuses on generating regular income. Instead of relying on capital appreciation, the primary source of return in private debt comes from interest payments made by borrowers. One example of this investment type is private mortgage debt funds.

One of the notable advantages of private mortgage investment is the reliable and consistent income stream they offer. Investors benefit from stable cash flow, which can supplement primary income or be used to bolster other investments. 

Investing in private mortgage investment funds also allows for portfolio diversification. By adding income-focused investments to a portfolio, investors can find a balance between the potential for long-term appreciation and the stability of regular income.

Income Investment Taxes

It is important to recognise that cash flow from income investments is generally considered taxable income, and the tax rate is determined based on an individual’s tax bracket and other relevant factors.

To ensure an accurate income tax return, investors should consult with their tax professional or financial advisor, who can provide personalised guidance based on their specific circumstances. They can help navigate the intricacies of income tax filing and assist in optimising your tax position while adhering to the relevant laws.

Arthurmac and Mortgage Debt Fund Investments

Understanding the tax implications of different investment strategies is essential for achieving your financial goals and making informed investment decisions. 

If you are interested in learning more about the income-focused investment opportunities Arthurmac offers through private mortgage debt funds, please get in touch with our expert team. Simply call Arthurmac on 1300 417 690, or complete our contact form and we will get back to you as soon as possible.


Disclaimer: Please be advised that it is highly recommended to conduct thorough research and seek guidance from a financial expert prior to making any investment decisions. It is further recommended to regularly review your investment portfolio and make necessary adjustments to ensure it aligns with your financial goals.

Stuart Styles

Managing Director Stuart has 16 years of experience as a Financial Services professional having worked previously in asset finance & management roles within the Motor Industry.