You generally need to keep your tax records for five years from the date you lodge the return they relate to, not five years from the end of the financial year. That is the standard rule for both individuals and businesses, and for most people it is the only one that matters. But there are important exceptions that stretch the period well beyond five years. If you own an investment property, shares, or other assets, you need to keep the records tied to them until five years after you sell, which can mean holding paperwork for decades. Records connected to a dispute with the ATO, an amended return, a depreciating asset, or a carried-forward loss also have their own longer clocks. The safe habit is to keep everything for at least five years from lodgment, and to keep asset records for as long as you own the asset plus five years after.
The five-year rule, and when the clock starts
The core rule is simple once you know where the five years begins. You must keep the written evidence that supports your return for five years from the date you lodge that return. The clock does not start on 30 June, and it does not start when you earned the income. It starts the day the return goes in. So if you lodge your 2024 to 2025 return in October 2025, you need to keep those records until October 2030.
This matters because lodgment dates vary. Someone who lodges late, or who uses a tax agent’s extended deadline, starts their five years later than someone who lodged in July. If you are not sure when a return was lodged, your tax agent will have the date on file, and it is worth knowing, because it sets the retention clock for that year. Our guide on tax return deadlines and documents explains how the lodgment dates work.
Why five years, and what the records are for
The five-year period exists because that is the window in which the ATO can review your return and ask you to substantiate what you claimed. If you are selected for a review or audit, the burden is on you to prove your income was declared and your deductions were genuine, and the way you do that is with the records. No records, no proof, and a deduction you cannot substantiate can be disallowed, with tax, interest, and sometimes penalties added on top. Keeping the paperwork is not bureaucracy for its own sake; it is the evidence that protects the position you took.
This is also why “I had the receipts but threw them out” is not a defence. The obligation is to keep the evidence for the full period, so the ATO can check it if it chooses to. For most people nothing is ever requested, but the records are the insurance, and the cost of not having them falls entirely on you.
What counts as a record you need to keep
A tax record is anything that supports the figures in your return. For an individual that means income statements and payment summaries, bank and investment statements showing interest and dividends, receipts and invoices for work-related and other deductions, records of donations, private health insurance statements, and anything else you relied on to work out what you declared or claimed. For a rental property or investments, it extends to purchase and sale documents, loan statements, and records of expenses and improvements.
The point is that the records are tied to the claims. If you claimed a deduction, you need the evidence for it. If you declared income, you need the record of it. If you are unsure what to keep in the first place, our guide on what records a sole trader must keep covers the details for individuals and sole traders, and this page is about how long to hold them once you have them.
Capital gains tax assets: keep records far longer
This is the exception that catches people out. For an asset that is subject to capital gains tax, such as an investment property, shares, managed funds, or crypto, you need to keep the records until five years after you sell it, not five years after you bought it. That is because when you eventually sell, you work out the capital gain from the cost base, which is what you paid plus buying costs, improvements, and selling costs, and you need the original records to prove that cost base, even if the purchase was twenty years earlier.
In practice this means the records tied to an asset must be kept for the entire time you own it, plus five years after the CGT event, which is usually the sale. Lose the purchase contract and the records of improvements, and you may not be able to prove your cost base, which can mean a larger taxable gain than you actually made. For anyone holding long-term investments, this is the single most important record-keeping point. Our piece on how interest and capital gains are split between co-owners explains why each owner keeps their own share of the cost base records for a jointly held asset.
Depreciating assets have their own clock
If you claim a deduction for the decline in value of an asset you use to earn income, a work laptop, tools, or equipment in a business, you need to keep the records for five years from the date of your last depreciation claim on that asset, not from when you bought it. Because depreciation is claimed over the effective life of the asset, often several years, the record you need to prove the original cost has to survive until five years after the final claim. A tool depreciated over eight years therefore needs its purchase record kept for well over a decade.
Records tied to a dispute or an amendment
Two more situations extend the clock. If you are in a dispute with the ATO, you need to keep the relevant records for the later of five years from lodgment or five years from the date the dispute is resolved, because the records may be needed while it is on foot and afterwards. And if you amend a return, the five-year period for the records affected generally runs from the date of the amendment, not the original lodgment, because the amendment is effectively a fresh position the ATO can review. In both cases the practical answer is the same: do not throw records out while anything about that year is still unsettled.
Carried-forward losses
Losses are another reason to keep records longer than you might expect. If you have a capital loss or a tax loss that you carry forward to offset against future income or gains, you need to keep the records that establish that loss for as long as it can still affect a return. A capital loss carried forward for ten years before it is used still needs its supporting records, because when you finally apply it, you have to be able to prove it. The record-keeping period effectively follows the loss until five years after the year you actually use it.
The rules for businesses
Businesses follow the same five-year period, with the clock starting from when you prepared or obtained the record, or completed the transaction it relates to, whichever is later. That covers income and sales records, expense and purchase records, year-end records like stocktakes and asset registers, payroll and super records, and GST and BAS records. Some categories have their own start points, for example fringe benefits tax records run five years from when the FBT return is lodged, and super contribution records run from the date of the contribution.
For a business the stakes are higher simply because there are more records and more at risk if they are missing, so a reliable system matters. Our guide on what your accountant needs for your business tax return sets out what to gather and keep, and good record-keeping through the year makes both the return and any future ATO query far easier to handle.
Can you keep records digitally?
Yes. The ATO accepts electronic records, and for most people digital is now the sensible default. A photo or scan of a paper receipt is acceptable as long as it is a true and clear copy of the original and shows all the required details. Records can be stored in accounting software, a cloud folder, or on your own device, and they can be encrypted or password-protected, provided you can produce them in a readable form, in English, if the ATO asks.
Digital storage solves the two biggest practical problems with paper, which are fading receipts and lost paperwork. Thermal receipts in particular fade to blank within a year or two, so photographing them as you go is the simplest way to make sure your evidence survives the full five years. The format does not matter to the ATO as long as the record is complete, legible, and retrievable; a well-organised folder or a good accounting app meets the obligation just as well as a shoebox of paper, and far more reliably.
What happens if you don’t keep records
Failing to keep adequate records is a problem on two fronts. The immediate one is that if the ATO reviews a year and you cannot substantiate what you claimed, those claims can be disallowed, leaving you with extra tax, interest on the shortfall, and potentially a penalty. The burden of proof sits with you, so an honest deduction you genuinely incurred can still be knocked back purely because you cannot evidence it. The second front is that record-keeping is itself a legal obligation, and failing to keep records as required can attract penalties in its own right, separate from any issue with the underlying claim.
In practice the ATO is usually more interested in getting the record-keeping fixed than in punishing an honest taxpayer over a one-off gap, particularly for individuals. But relying on that leniency is a poor plan, because the easy cases become expensive ones the moment there is a real amount at stake and nothing to back it up. Keeping the records is far cheaper than reconstructing them, or paying tax on income you could have offset if only you had the paperwork.
Closing a business, selling up, and deceased estates
A few life events deserve their own mention because people assume the obligation ends when the activity does, and it does not. If you close or sell a business, you still need to keep its records for five years from the relevant date, so winding up does not let you clear the filing cabinet straight away. The same applies to a company that is deregistered: the record-keeping obligations survive the event that ended the entity.
Deceased estates work on the same principle. When someone passes away, the records that support their tax affairs, and the cost base records for any assets passing through the estate, still need to be kept, because a final return may be required and the assets carry their history to the beneficiaries. For an inherited asset, the original cost base records often matter to the person who inherits it when they later sell, so those records should be passed on rather than discarded. If you are handling an estate or selling a long-held asset, our business and tax advisers can tell you exactly which records need to survive and for how long.
A simple approach that covers you
The cleanest way to stay compliant without overthinking it is to keep two tiers. Keep everything that supports each year’s return for at least five years from the date you lodged that year, which handles the standard rule for income and deductions. Then keep a separate, permanent file for anything tied to an asset you still own, the purchase contract, the records of improvements, and the buying costs, so that when you eventually sell, the cost base is fully documented. Add to that permanent file anything connected to a loss you are carrying forward or a dispute that is still open.
Digitising as you go makes both tiers easy. Photograph receipts when you get them, save statements as they arrive, and keep the asset file somewhere it will not be lost between house moves and new phones. If you use an accountant, much of this is held or accessible through them as well, which gives you a second copy, but the obligation to keep the records is ultimately yours.
