Tax planning is an approach that can be taken in order to arrange your financial affairs in a way that minimises your taxes. The following outlines certain tax planning considerations.

Reducing Income

• Salary sacrifice into superannuation
• Salary package arrangements such as motor vehicle, mobile phone, laptop, etc
• Investments that earn income should be in the name of the spouse with the lower taxable income
• Consider investing in growth assets such as shares or property (where appropriate). They may have substantial tax benefits such as franking credits for shares or tax-free and tax deferred components for property securities. Furthermore, unrealised capital gains are not taxed and realised capital gains may be taxed concessionally
•  If a capital gain has been made, consider realising any capital losses to offset this capital gain
• Use mortgage interest offset accounts (where appropriate);
• Make sure asset is held for at least 12 months before disposal to obtain the benefit of the relevant capital gains tax discount

Increasing Deductions

• Consider negative gearing investments if marginal income is in a higher tax bracket. Care should be taken, however, to ensure that it is appropriate to your needs
• Make sure that capital losses are carried forward and offset against capital gains
• Deductible superannuation contributions must be paid by year end
• Maximise depreciation deductions on rental properties using a quantity surveyor to value depreciable assets. A quantity surveyor can also determine the appropriate costs of buildings for special income producing property write-offs;

DISCLAIMER:
This information is intended to inform readers and provide general guidelines and information. It is not a substitute for professional advice. Binghay & Co Pty Ltd expressly disclaims all liability to any person who relies, or partially relies, upon anything contained in this website.