HOW TO SAVE TAX
Loopholes in the Tax Act have all but disappeared and it is now quite difficult for the average employee to claim huge tax deductions. However, there are still some legal strategies available that can help to minimise tax while you accumulate wealth.
The first of these is salary sacrifice whereby you come to an arrangement with your employer for your superannuation contributions to be made from pre-tax dollars. In most cases this means your superannuation incurs just the 15% contributions tax instead of losing 48.5% if it was paid for you after tax.
By far the best way to save tax is to focus your energies on building a large
investment portfolio where the bulk of the returns comes from capital gains and
not income. In contrast to interest which is taxed annually, capital gains enjoy
a 50% tax concession and are not payable until you sell the asset. At Whittaker
Macnaught we encourage a strategy of accumulating assets throughout your working
life. By doing this you can then defer your capital gains tax for 30 years or
more. To find out more, talk to one of our senior financial advisers.
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