End of Financial Year Tax Strategies
15 Jun 2017
As we head towards the End of Financial Year, our thoughts turn to 'tax time' and how we can best optimise your position. Due to the superannuation changes from the last Budget and the usual clean-up of end of year items, Intralink is awash with paperwork. The team is busily working through your situation to make sure that everything which needs to be done is done prior to 30 June. This includes, reviewing contributions to super, to make sure you are maximising the tax benefits available to you and ensuring that the minimum income is paid out for those who have super income streams, to benefit from tax free income earnings in your super fund. The after-tax contributions drop for many and for some 30 June 2017 will be the point where after tax super contributions can no longer be made. Transition to Retirement Pensions may need to be rolled back to accumulation and we need to make sure that all clients affected comply with the $1,600,000 pension phase cap. To top it all off, the government has been late to release a lot of the detail required and the capital gains deferral rules for certain clients with income streams is truly mind boggling, in terms of the unnecessary complexity. Through our proactive advice, your adviser will ensure anything that needs to be done will be done, however we thought it might be helpful to provide a list of year end items for you to consider. Review your investment portfolio to determine whether investments should be sold to offset any capital gains or losses made throughout the financial year. Make sure you get Capital Gains Tax Concessions by holding on to assets for more than 12 months where possible. Maximise tax deductions through super contributions. Alternatively, make a contribution into super for your spouse - this could provide you with a tax offset. Income Protection policy. The premiums are tax deductible, so make sure you claim it. Borrow to Invest through home equity loans, margin lending, or protected equity loans and pre-pay the interest to reduce your assessable income. We do not see borrowing to invest as a tax strategy. The treatment of deductible interest verses capital gains, just makes it easier to generate positive results. Review income distributions through family trusts. You can lose franking credits in some circumstances if a family trust election is not made and you need to provide details of how the trust income will be distributed before year end. Make a non-concessional contribution to super. Last opportunity to utilise the $540,000 bring forward rule (if under 65 on 1 July 2016) or $180,000, prior to this amount being reduced. Review tax deductible items and sort through receipts. Work related expenses, such as training courses relating to current employment or uniforms can be deducted for tax purposes so make sure your records are up to date.