Annabelle Dickson
What is a joint investing account?
A joint investing account lets two or more people hold investments together under one account name. Each person is a co-owner and has an equal or agreed share of the account.
This matters for tax. Even though the account has one name, each person must declare their share of income such as dividends, interest or capital gains in their own tax return.
Joint accounts can work for a range of investors. For example, a couple saving for a home deposit might open a joint investing account and contribute equally. Siblings could also combine savings to start building long-term wealth sooner. Think about whether you are comfortable sharing money and decision-making.
How do joint investing accounts work?
Everyone named on the account usually has equal access. Each person can deposit money, withdraw funds and place trades.
Example: Two people own units in an ETF together, with one holding 60 percent and the other 40 percent. Any dividends are split in line with these percentages. The same applies if the investment is sold and capital gains are realised. Each person then reports their share in their own tax return. If eligible, they may apply the 50 percent capital gains tax discount.
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Tax on joint investments: who declares what?
The ATO looks at beneficial ownership. Tax follows each person’s actual share of the investment, not just the name on the account.
Interest on joint cash accounts
- Interest is assessable to account holders in proportion to their beneficial ownership. The ATO presumes equal shares.
- If ownership is not equal, you need evidence such as trust documents or contribution and withdrawal records.
Dividends and franking credits
- For jointly held shares or ETF units, dividends are split in the same proportions as ownership. The same rule applies to franking credits.
- Example: If a share pays $1,000 in fully franked dividends and you own 70 percent, you would report $700 of income and 70 percent of the franking credits.
Capital gains tax
- When you sell jointly held shares or ETF units, each holder calculates their share of any capital gain or loss by reference to their interest and cost base.
- If the asset was held for at least 12 months and you are an Australian resident for tax purposes, the 50 percent CGT discount may apply.
- For dividend reinvestment plans, the ATO treats these as if you received cash then bought more units. Good records are vital, especially if ownership is not equal.
Benefits of a joint investing account
- Simplification: One portfolio for a shared goal can simplify contributions, rebalancing and reporting.
- Transparency: All parties can see deposits, withdrawals and trades.
- Potential cost savings: You may avoid duplicating some fees, depending on the platform.
- Fair tax treatment: With evidence to rebut the presumption of equal ownership, the ATO recognises proportional ownership so tax aligns with each person’s share.
Key risks
- Shared access risk: Any holder may transact. High trust, clear rules and a contingency plan are essential.
- Record-keeping burden: If your split is not 50:50, you must keep evidence of contributions and an agreed beneficial ownership schedule.
- Relationship breakdown or death: Outcomes differ for joint tenants versus tenants in common. There are special CGT rules when a joint tenant dies. Get legal advice.
Joint account vs other ways to invest together
| Structure | Who owns assets | How tax works | Complexity | When it may suit |
|---|---|---|---|---|
| Joint investing account | Individuals as co-owners | Each holder submits a tax return for their share. Franking credits and CGT split by beneficial ownership. ATO presumes equal ownership. | Low to moderate | Couples or family saving toward shared goals |
| Separate individual accounts | Each person | Each declares their own income and gains | Low | When you want clean separation or different risk profiles |
| Family trust | Trustee for beneficiaries | Distributions taxed in the hands of beneficiaries at their individual rates | Higher | Families seeking distribution flexibility and asset separation |
| Company | Company | Profits taxed at company rate. Dividends paid to shareholders with potential franking credits. | Higher | Business-style investing that retains earnings |
The bottom line
Joint investing accounts can be a straightforward way for Australians to invest together. They are useful for couples and families working toward shared goals. Joint accounts can also help keep things fair and transparent.
The key rule is that tax follows ownership with the ATO presuming equal shares unless you can show otherwise. Document contributions and keep accurate records to support your split.
If you want a simple way to pool money and invest together, a joint account can be a smart and flexible choice, provided you have trust, clear rules and consistent record-keeping.
The information above is general only. It does not take into account any person’s objectives, financial situation or needs and does not provide comprehensive information on any matter.
Betashares is not a tax adviser. Tax information is based on current laws and interpretations, which can change. Seek advice on legal, stamp duty, taxation and accounting implications before investing in ETFs or other financial products.
