The Top 5 Tax Strategies you must know about

You should not make investments only to get a tax gain. Tax should not be the motive for investment selections, nevertheless, there are numerous of tax strategies to take into account within wealth creation planning.


1. Pre-pay interest and small asset write-offs;

    Individuals have the ability to prepay interest on loans utilized to obtain income-generating properties or dividend-paying stocks to lower taxable income that is useful if someone has more money from the relevant year because of the addition of a sizable capital gain. Individuals may also write off costs on small asset purchases that relate to income-earning activities.

 2. Superannuation;

    If you've got your own self-managed superannuation fund (SMSF), that is invested primarily in listed shares paying fully franked dividends, in that case your super fund might not end up having to pay any tax or finding a tax refund.

    Recent budget announcements include deferral of higher concessional contribution caps for folks aged 50 as well as over and reduced tax concession on concessional superannuation contributions where annual income exceeds $300,000

    Low-income earners should consider making an after-tax contribution to super since they may possibly be entitled to tax-free co-contribution benefit as much as $1,000.     Opportunity to get a spouse rebate for super contributions made out of respect to a low-income spouse. The spouse rebate will be worth as much as $540.

3. Salary packaging

    Some employers who are considered to be in the not-for-profit sector obtain particular fringe benefits tax (FBT) concessions, so it is important for employees to optimise these benefits.

    There will also be benefits which are exempt from FBT there are also ones that get concessional treatment, for example motor vehicles. Each of these forms of benefits needs to be regarded for inclusion into salary-sacrifice plans.

    Employers may also gain from salary-packaging options as labour costs for example work cover and payroll tax could be reduced under most of these agreements.

 4. CGT discount and investments in Listed Investment Companies

    Hold onto investments for upwards of 1 year prior to selling to make use of the capital gains tax (CGT) discount.     Investors frequently overlook that the CGT costs are going to be cut in two when they wait over 1 year prior to selling.

    5. Organization possessing investment assets

    One of the most significant income tax planning techniques is always to consider which entity within the household group gets the financial assets. You will need to take into consideration what is the central aim within your situation - asset protection, income-splitting versatility, succession and estate planning. It could be as difficult as establishing a discretionary trust or as common as placing assets within the name of a low-income partner.

financial planning
You should never have as the major reason for an investment obtaining a tax gain. Tax should not be the motive for investment selections however, as shown above, there are numerous of tax strategies that may be implemented within the law and which will improve your financial situation..


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