30 June is almost upon us, you need to be tax planning now if you want to make some sensible tax savings. Here are some tax planning strategies that can be implemented before 30 June, there are also some others should be considered for long term planning.
Before 30 June
- Defer income to the new financial year. This can apply to both businesses and individuals.
- Review your investment portfolio NOW and determine if there are any investments could be sold to offset any capital gains or losses made throughout the year.
- Ensure you get capital gains tax concessions by holding assets for more than 12 months.
- Maximise tax deductions through super contributions. Alternatively, make a contribution into super for your spouse – this could provide you with a tax offset.
- Borrow to invest through home equity loans, margin lending or protected equity loans and pre-pay the interest.
- Ensure you review income distributions from family trusts. You can lose franking credits in some circumstances if a family trust election is not made.
- Make sure you hold assets in the most appropriate tax structure. Individuals, companies, trusts and super funds are all taxed differently on their capital gains and income.
- Use franking credits to reduce tax on lower taxed entities like super funds and lower income earners. Remember that excess franking credits are refundable.
- Income split wherever possible to take advantage of the progressive tax system.
Legally saving tax is an important step on the “Road to Financial Independence” and the way to achieve the best outcome is to seek professional advice early.
At GTC Financial our goal is to help our clients to achieve Financial Independence and we help you save tax by taking advantage of sensible tax planning options.