Tax Planning
METHODS OF REDUCING TAX LIABILITY
The objective of any tax planning arrangement is to reduce the tax payable in respect of a given quantity of profits or earnings, including profits on the realisation of assets within the CGT regime. In broad terms, there are several different ways of reducing liability to tax. These are summarised below.
Aim Possible methods
Reduce assessable income Derive capital, not income
Avoid deriving assessable amounts
Select best CGT option for calculating gain
Maximise CGT cost base
Income exemptions
Increase deductions and offsets Maximise present deductions and concessions
Deductions for individuals
Deductions for businesses
Reduce rate of tax/defer payment of tax Maximise offsets
Use withholding tax provisions
Averaging for primary producers
Averaging for authors, performers,
inventors, sportspersons, etc
Delay derivation of income
Divert income Alienate income to another
Transfer income-producing assets
Contract with associated taxpayers
Use discretionary distributions
Commercial considerations
Select tax planning “vehicle” Family members
Family partnerships
Family companies
Family trusts
Loss companies
Unit trusts
Loss trusts
Tax haven vehicles
Avoid unforeseen problems Partnership restructuring
Business sales
CGT issues
These strategies may conflict in a particular case. For example, a high income earner may be desirable as a holder of a negatively geared property from an income tax perspective, but would be undesirable from a CGT perspective if that property was expected to increase significantly in value. Thus, it is necessary to balance different tax considerations. Non-tax issues must also be considered, eg the high income earner may be an undesirable owner of an asset if that person is a professional who may be subject to a negligence action.
Superannuation- Borrowing for Superannuation
Superannuation is most important in keeping up our standards of living, particularly in advanced age and retirement. There are excellent tax concessions opportunities and we must make the most of them, otherwise our standard of living will suffer. We do not know how much longer the Government will be paying such generous pensions making self reliance very important.... Read more
Share Trading
It is always a wise investment to invest in the market in blue chip shares across various sectors to reduce your risk.
Share trading under prudent professional training can and will accelerate overall gains in a flat or declining market.... Read more
January 2010
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Your lodgement is logged in our system, generally in date order and attended to quickly to ensure a speedy turnaround. However we pride ourselves on our professionalism, therefore we do not have a same day service of completion and lodgement. Our business is based on a long term relationship with each client that covers all aspects of the client's financial affairs, not just the lodgement of tax returns as important as that may be.
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