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With the end of financial year fast approaching, it is time to once again review your financial arrangements and consider
the steps that you may be able to take to minimise your tax obligations.
Some of the common tips for investors are listed below:
Tips for investors
1. Prepay interest on Investment Loans
Some lenders allow borrowers to prepay interest on investment loans. Where this is the case, the prepayment of interest may
enable you to bring forward the interest expense to offset taxable income. Investors should be aware that lenders may charge
a fee for the prepayment of interest and should consider this expense in any decision.
2. Manage Capital Gains
Investors should seek advice as to whether carried forward capital losses can be used to offset capital gains, or whether the
50% capital gains tax discount may be applied to assets held for more than 12 months.
3. Maximising deductible expenses
Investors should ensure that they are maximizing the deductions they are able to claim from expenses incurred in
earning assessable investment income.
Expenses that you may be able to claim include fees for financial advice, account keeping and management fees
and interest payments on investment loans. Income protection insurance may also be tax deductible.
4. Superannuation contributions
The Federal Government limits the amount of concessional contributions that you may make to your superannuation
in any given year. Additional contributions may be taxed at a rate of 31.5% on top of the normal 15% contribution rate.
While maximising the contributions made may have tax benefits, it is important to ensure that the limits are not exceeded.
5. Review ownership structure
The ownership structure of your investments may impact the level of tax that you pay on investments. If you have a self
managed superannuation fund, there may be opportunities to improve your tax situation. You should however seek advice
from qualified tax professionals before proceeding with any restructuring.
6. Gearing for investors in super
Borrowing for investments in super may allow you to generate increased returns when invested wisely, despite the
restrictions for super borrowings. If you are restricted from making further super contributions, this strategy may allow
a super fund to maximize its earnings.
As always, the above tips are a guide only and you should consult an accountant, financial planner or taxation professional
before acting on any of the opportunities presented in this newsletter.
Article Courtesy of Chris Andrews Latrobe Financial (one of Access Loans Panel Lenders)
As always, the above tips are a guide only and you should consult an accountant, financial planner or taxation professional before acting on any of the opportunities presented in this newsletter. We would be happy to introduce you to tried and tested professionals in these fields of expertize.
For further information please contact our office
Ph 1300 755 133
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