Want to get ‘sorted’ for tax time?

The end of financial year is the time to get things in order. Here are 12 strategies that could help you build and protect your personal wealth in a tax-effective manner.

By

Here are 12 strategies that could help you build and protect your personal wealth in a tax-effective manner.

Strategy 1: Get more from your salary or bonus

If you’re an employee, you may want to sacrifice your pre-tax salary or bonus into super rather than receive it as cash, so you can:

  • reduce tax on your salary or bonus by up to 34%
  • take advantage of the contribution cap that applies in this financial year

Strategy 2: Make tax deductible super contributions

If you earn less than 10% of your income* from eligible employment (eg. You’re self-employed, or not employed), you may want to invest in super by making concessional contributions, so you can:

  • claim your contribution as a tax deduction
  • take advantage of the contribution cap that applies in this financial year

Strategy 3: Make after tax contributions to super

If you have an investment in your own name, you may want to cash out the investment and use the money to make a personal after-tax super contribution, so you can:

  • reduce tax on investment earnings by up to 34%
  • increase your retirement savings

Strategy 4: Use super to manage capital gains tax (CGT)

If you make a capital gain on the sale of an asset this financial year and earn less than 10% of your income* from eligible employment, you may want to invest the sale proceeds in super, so you can:

  • claim a portion of the contribution as a tax deduction
  • increase your retirement savings

Strategy 5: Get a super top up from the Government

If you earn less than $50,454*pa, of which at least 10% is from employment or a business, you may want to make a personal after-tax super contribution, so you can:

  • qualify for a Government co-contribution of up to $500
  • increase your retirement savings

Strategy 6: Boost your partner’s super and reduce your tax

If you have a spouse who earns less than $13,800*pa, you may want to make an after-tax super contribution on their behalf, so you can:

  • receive a tax offset of up to $540
  • increase your spouse’s retirement savings

Strategy 7: Buy insurance through super tax-effectively

If you’re eligible to make salary sacrifice super contributions or are eligible to receive Government co-contributions, you have a spouse who earns less than $13,800*pa, or you earn less than 10% of your income* from eligible employment, you may want to purchase life and total and permanent disability insurance in a super fund, so you can:

  • benefit from tax concessions
  • make premiums more affordable

Strategy 8: Pre-pay income protection premiums and reduce this year’s tax

If you’re employed or self-employed, you may want to pre-pay 12 months’ income protection insurance premiums, so you can:

  • claim your tax deduction upfront
  • pay less income tax this financial year

Strategy 9: Offset a capital loss against a capital gain

If you’ve received capital losses from your investments, you may want to utilise the capital losses against any capital gains, so you can:

  • manage your tax on your investments more efficiently

Strategy 10: Defer asset sales If you’re thinking of selling a profitable asset this financial year, you may want to defer the sale until a future financial year, so you can:

• manage your cash flow more efficiently

Strategy 11: Pre-pay investment loan interest

If you have established (or are considering establishing) a geared investment portfolio, you may want to pre-pay 12 months’ interest on your investment loan, so you can:

  • manage your cash flow more efficiently
  • potentially pay less tax this financial year

Strategy 12: Make better use of your tax refund

If you receive a tax refund, you may want to use your refund to pay off non-deductable debts first, pay off your home loan and then borrow to invest or fund your daily living expenses and contribute your pre-tax salary into super, so you can:

  • save on interest
  • invest your refund outside of super
  • boost your super tax effectively

A financial planner can sit down with you and look at the different strategies to see which suits you best. Depending on your circumstances, the strategies outlined here have the potential to make a significant difference to your financial situation now and in the future. But you’ll have to take action before 30 June to benefit from some of the opportunities available this year.

Find out more and book an appointment.

 Note: To use strategies 1 to 7, you generally need to be eligible to make super contributions. Furthermore, you won’t be able to access your super until you satisfy a condition of release.
Super strategies should be in consideration of concessional and non-concessional caps.
* Includes assessable income, reportable fringe benefits and reportable employer super contributions. Other eligibility conditions apply.

Important information

This document is published by National Australia Bank Limited, an Australian Financial Services Licensee, Registered office at Level 4 (UB 4440), 800 Bourke Street, Docklands VIC 3008. This document contains general information only. National Australia Bank Limited (NAB) is not a registered tax agent. If you wish to rely on this information to determine your personal tax obligations, you should consult with a Registered Tax Agent. In preparing this information, NAB did not take into account the investment objectives, financial situation or particular needs of any particular person. Before making an investment decision, a person needs to consider (with or without the advice or assistance of an adviser) whether this information is appropriate to their needs, objectives and circumstances.

©2016 National Australia Bank Limited ABN 12 004 044 937 AFSL and Australian Credit Licence 230686