Watch the video for a summary of the tips below
Contributions to superannuation continue to be an effective and tax-advantaged retirement savings strategy.
Depending on your age and personal circumstances, you may be able to contribute up to $35,000 into superannuation concessionally, and up to $540,000 in after-tax contributions using the ‘bring forward’ provisions.
Penalties exist for exceeding these caps, so ensure you get professional advice before adjusting your strategy.
While most people are well aware of investment risks, legislative risk is often forgotten. It could be many years between you wanting to retire, and being able to access your superannuation.
While there are no new taxes applied to superannuation in the 2015/16 Budget, Governments from both sides of politics are likely to continue to tinker with superannuation rules in the future. It is prudent to assess on a regular basis the proportion of your wealth held within and outside the superannuation system.
A popular non-super, wealth creation strategy is gearing, or borrowing to invest.
Clients facing imminent tax liabilities can potentially reduce these with appropriate gearing strategies in place. For clients wanting to avoid the possibility of a margin call, protected loans can be utilised.
Interest rates are at historic lows and the cost of borrowing reflects this.
Capital gains realised during this financial year 2014/15 may be offset by capital losses from previous years.
On the flip side, you might look to realise some capital gains to utilise capital losses you have already incurred this year.
If you don’t have any capital losses, selling investments you've held for at least twelve months can give you a capital gains tax discount.
Balancing capital gains and losses is best discussed with your adviser or tax accountant.
For an investment property or share portfolio, it should be possible to pre-pay your interest for the 2015/16 financial year. This will offset the interest expense against the current 2014/15 financial year.
Additionally, prepaying interest on investment loans (including margin loans) locks in a fixed rate of interest, providing budget certainty for the year ahead.
The ATO generally allows the cost of any premiums paid to insure against the loss of your income as a tax deduction.
Just like the pre-payment of interest on investment loans, premiums pre-paid for up to twelve months in advance may be deductible in the current financial year.
If you have charitable intentions consider making a donation to a Deductible Gift Recipient.
For those with a deeper interest in philanthropy other strategies include creating a Private Ancillary Fund, or opening an account in a Public Ancillary Fund.
Donations through both of these structures are also tax deductible. We can help you determine which approach to philanthropy is right for you.
Commonwealth Private offers tailored banking and advisory services for clients with household income in excess of $450k p.a. or the intent to invest or borrow $2.5million or more.
Contact your local Private Banker on 1300 362 081 or alternatively request a callback.
This communication has been prepared by Commonwealth Private Limited ABN 30 125 238 039 AFSL 314018 without taking account of the objectives, financial situation or needs of any particular individual. You should, before acting on the information in this communication, consider its appropriateness to your circumstances and if necessary seek appropriate advice. Commonwealth Private Limited is a wholly owned but non-guaranteed subsidiary of The Commonwealth Bank of Australia ABN 48 123 123 124 AFSL/Australian Credit Licence 234945 (Commonwealth Bank). Commonwealth Private's services are provided by a team consisting of a Private Banker who is a representative of Commonwealth Bank and Private Wealth Managers who are representatives of Commonwealth Private Limited.
Commonwealth Private Limited and the provider of this communication are not registered tax (financial) advisers under the Tax Agent Services Act 2009. If you intend to rely on any information in this communication to satisfy liabilities or obligations or claim entitlements that arise, or could arise under a taxation law, you should request advice from a registered tax (financial) adviser or a registered tax agent.