End of Financial Year Tax Tips

The end of the tax year is almost here.  If you haven’t planned how you will maximise your income and save some tax, take note! The most effective strategies are often the simplest and can be applied before 30 June this year whilst others should be considered for next year. Here are both categories to consider:

Pre 30 June

  • Defer non-essential income until the new financial year.
  • Review your investment portfolio prior to 30 June to determine whether investments should 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.

Next year

  • 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.

Take care with “tax-effective” investments

The golden rule when considering any investment is to focus on the quality and prospects of the assets and treat any tax advantage as a bonus.  The message in some end-of-year product marketing is that the tax deductions are all that matter.

The long-term prospects of some of these “tax-effective” schemes are uncertain.  The investments are usually illiquid and can have extremely high fees.  Remember that over time a good investment will be much more valuable than a tax break this year.

In an ever-changing and complex world, seeking professional advice can help you through achieve the best result. We invite you to contact us to explore your individual tax planning opportunities further… but please don’t leave it until the last minute.

Comments are closed.


NOTICE: Regarding Unsolicited Emails

We have recently learned of unsolicited emails that are being sent out, claiming to be “Fusion Financial Services” which typically contain the subject line “Invoice Is Ready For [Insert Name].

While the sender may appear to be The Fusion Group, we want to confirm that this is not the case. The email includes a virus in the form of a Word document, claiming to be an invoice from Fusion. In the event that you receive an email that fits this description, close the message immediately and report it as spam.

Thank you,
The Fusion Group

Controlling your Self Managed Super

Self Managed Super Funds (SMSFs) continue to grow in popularity. What is the large appeal that prompts so many people to go their own way despite all of the obligations and responsibilities of being a trustee – and being regulated by the Tax Office? … more

Are Your Inactive Bank Accounts at Risk?

We’ve all heard about the “lost billions” sitting in idle superannuation funds around Australia but are you aware of what’s happening to hundreds of millions of dollars sitting in “inactive” bank accounts? Read on, you may be very surprised. … more