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Salary sacrificing Posted on Sep 23, 2015 by editor

Tax

While many employees can sacrifice salary in exchange for most work-related purchases, it is essential that employers are aware of FBT when working out the expense that will replace the income in a salary sacrifice arrangement. Employees should also be wary that if their employer has to pay FBT, that cost will most likely be passed on to them under a salary sacrifice arrangement. If an employee needs to purchase equipment for their work, they can work out a salary sacrifice with their boss to buy the equipment and reduce their personal tax bill if: the piece of equipment is […]

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Reducing tax in your SMSF Posted on Sep 15, 2015 by editor

Super

There are some effective, and often quite simple, strategies to reduce the tax payable in an SMSF that many fail to take advantage of. Nomination of beneficiary Those who nominate a spouse, child or financial dependent as a beneficiary may avoid paying tax on a lump sum death benefit. Delaying TTR commencement Members looking to begin a transition to retirement pension in their late 50s may delay this decision until age 60. The benefit of waiting is that members avoid being taxed on super fund pension payments. This strategy may be particularly useful for members who are still working or […]

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Using the CGT discount Posted on Sep 15, 2015 by editor

Tax

A capital gain is a profit made from the sale of an asset. Your capital gain is calculated as the difference between what you paid for the asset and what you eventually sold it for. A capital gain is considered by the ATO as part of your assessable income and is taxed at your marginal rate. There is, however, a discount that may be applied to capital gains. If you have held the asset for over twelve months, you may be eligible for a 50% discount on the CGT. The CGT discount is also available to trusts and superannuation funds, […]

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Diversified growth strategies Posted on Sep 8, 2015 by editor

Super

Australians looking to increase their super fund’s annual returns may benefit from shifting to a diversified growth strategy. A diversified growth strategy is a multi-asset program that invests in a range of traditional and non-traditional return sources to achieve a defined outcome. A recent study has shown that including a 15% allocation to a diversified growth strategy in a typical super portfolio could increase the fund’s realised returns, lower its overall volatility and improve its risk-adjusted returns. The role that a diversified growth strategy could play within a fund depends on the nature of the investor. For example, super funds […]

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Negative gearing for property investors Posted on Sep 8, 2015 by editor

Tax

Whether you’re an established property investor or contemplating purchasing your first investment property, you may care to familiarise yourself with the way that negative gearing works. A property is considered to be negatively geared if the owner has taken on debt in order to acquire it and the net rental income is less than the costs of maintaining the property (including the interest paid on the loan). Investors with negatively geared properties are able to claim the shortfall between their associated costs and rental income as a deduction against their total taxable income. In the event that your taxable income […]

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Transitioning to retirement pension in an SMSF Posted on Sep 4, 2015 by editor

Super

The transition to retirement income pension is quite straight forward, however whether there are clear benefits depends on an individual’s personal circumstances. When an individual starts the transition to retirement income pension (TRIP) once they reach preservation age and are still working, they receive an income stream from their SMSF. Their existing account balance in their SMSF simply becomes a pension account, and any future contributions will go to a new accumulation fund in the same SMSF. The minimum income an individual is required to receive each year is 4 per cent of the balance of their pension account. The […]

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Family trusts Posted on Sep 4, 2015 by editor

Tax

While the ATO continues to crack down on its tax minimisation strategies, quite a few legal pathways to paying less tax while preserving wealth for retirement or estate planning purposes still exist. Family trusts have significant tax-saving abilities, and can save high-income earners a fair amount of money over a few years by apportioning wealth to members in lower income brackets via a strategy called streaming. Streaming income allows trustees to place a high proportion of the trust’s earnings into the names of their adult children (who are subjected to a lower marginal tax rate). Using the kids’ $18,200 tax-free […]

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