Raffi PailagianMBA, BSc, DipFP
Adviser / Managing Partner
“Nothing is certain but death and taxes”
That may be true, but the amount of tax you pay doesn’t have to be an unavoidable burden. Developing an effective tax strategy is another important pillar of a well-structured Financial Plan. In our penultimate article on The Ingredients of a Financial Plan, we look at what an effective tax strategy might include, and why it is important to your financial health.
There are three key objectives in a tax strategy:
Any decision you make about your tax strategy should be done with your overall financial picture in mind, with the ultimate outcome an increase in what’s in your back pocket.
How you structure your tax strategy is dependent on your overall financial position. There are, however, some broad areas you should look at:
Superannuation – Whether you make salary sacrifice or voluntary personal contributions, superannuation is a highly effective way to reduce your tax burden, whilst at the same time saving for the future. Check out our article Superannuation for more information.
Deductions – It might seem obvious, but making sure you are claiming all the deductions you are entitled to can have a big impact on your tax bill.
Negative Gearing – Long-term investing using borrowed funds provides the opportunity to negatively gear your investment, thereby reducing tax
Loan Restructuring – the tax implications on investment loans can mean you can save money if you are careful about the way you structure your borrowing.
SMSF – Setting up a SMSF and transferring or purchasing assets through this fund will mean your assets are taxed at a lower rate. Our article on SMSF will help you determine if this is something that would suit you.
Family Trusts – Setting up a family trust, or a company structure can mean some aspects of your income may be taxed at a lower rate.
Salary Packaging – if you are in a position to do so it can be tax effective to package things like your car and laptop as part of your salary.
Whether you are a small business owner or on a salary, getting the right tax advice is the best place to start. A good financial planner will be able to help devise the best strategy for your personal circumstances.
In case you were wondering, the saying “Nothing is certain but death and taxes” is often wrongly attributed to either Mark Twain or Benjamin Franklin. But it was originally used in 1716 by Christopher Bullock. Which just goes to show how long people have been complaining about paying taxes!
Manly Financial Services has many years’ experience in developing efficient tax strategies for individuals and businesses. If you would like advice on how to minimise your tax and maximise your financial position, give us a call on (02) 9976 3388, or click below and we will be in touch shortly.
Head Office: Suite 105-106, Level 1, 39 East Esplanade, Manly NSW 2095
Manly Financial Services Pty Ltd is a Corporate Authorised Representative (Representative No.: 321127) ABN 38 115 806 883 of Futuro Financial Services Pty Ltd, Australian Financial Services Licensee (AFSL 238478)
This website contains general advice only. You need to consider with your financial planner (or adviser), your objectives, financial situation and your particular needs prior to making an investment decision. Futuro Financial Services Pty Ltd and its authorised representatives (or credit representatives) do not accept liability for any errors or omissions of information supplied on this website.