10 Tax Planning Strategies to Minimise your Tax Bill
Plan Ahead. The most important strategy with tax minimisation is to plan ahead. Meet with your business advisor at least annually focusing specifically on tax planning.
Consider starting your own Self Managed Super Fund. SMSF’s are taxed at only 15% and there are a number of other tax breaks available in these entities.
Spend up before the end of the financial year bringing forward any of next year’s spending that can be used as a tax deduction before 30 June.
Companies that are small business entities pay a flat rate of tax of 27.5% this year, and the view of the government is to reduce this further over time to 25%.
Plan to earn capital profits rather than normal income. Individuals get a 50% discount on capital gain tax when they hold the asset for greater than 12 months.
Use a Family Discretionary Trusts to divert income and protect your assets. Trust provide great flexibility in allowing your to divert your income to family members paying a lower rate of tax.
Make sure you use the best method of claiming Motor Vehicle Expenses. There are numerous ways of claiming these expenses and the outcomes are substantially different depending on your circumstances.
Investment Properties are very popular in Australia due to the ability of claiming the negative gearing strategy which allows you to claim the losses on your rental property against your other income thereby reducing your tax.
Tax Offsets and rebates offer great opportunities to reduce your tax liability. Franking Credits from shares and a range of other offsets should always be investigated.
Salary Sacrificing, especially of superannuation contributions is a useful strategy to reduce tax and provide for retirement.