Time is running out to reduce your tax liability
The end of the financial year is approaching – have you made the most of your opportunities to invest wisely and reduce tax?
Invest in super and save
tax
Salary sacrificing into super – contributing pre-tax
earnings – could mean pushing your salary into a lower
Marginal Tax Rate (MTR) and consequently reducing overall
tax.
| Income sacrificed into super is taxed at a maximum rate of 15% – significantly less than outside of super, which could be taxed as high as 46.5%! |
If you’re self-employed, your super contributions are generally tax deductible. Age based limits apply, with the maximum deduction allowed being $105,113 for those over 50. From 1 July 2007, contributions will be 100% deductible but with new limits. Up until 30 June 2007, you may be eligible to make an after tax super contribution of up to $1million. If you have surplus money, seek advice as soon as possible!
Can you reduce your Capital
Gains Tax (CGT)?
Your capital gain is the profit made on an asset or the
difference between what you paid and the selling price.
Assets that may attract CGT can include real estate, business
sales, shares in a company, units in a managed investment
fund, and possibly even an inheritance.
Is now the best time to
sell an asset?
If you have held the asset for at least 12 months, your
CGT could be cut by 50%. There are small business concessions
for businesses owned for more than 15 years, which could
eliminate your tax completely!
Can you offset any capital
gains with losses?
For example, a loss from a previous financial year. Alternatively,
you can try to reduce your taxable income to move into a
lower income bracket to reduce your tax. Salary sacrifice
is one way to do this, which could reduce, or even eliminate,
CGT. Your individual situation will be unique, so seek advice
before 30 June to make the most of your opportunities to
reduce your tax this financial year.
 |
As at
16 May, 2007 |
