end of FY

[thefirstbruce]

I have asked a similar question before, but wouldn't mind some fresh input.
Would like to know what others are considering to 'pay the minimum legal amount of tax' pre June 30. After talking with a bunch of advisors, I have had:

- woodchip plantations (100% deduction but you can't leverage off it, or touch it for 7-10 years)

- 12 months prepaid interest on IP or margin loan for shares.

as I am a bit of a bear currently, I am being cautious on IPs and shares. any other suggestions appreciated. does anyone know if you can get a deduction on prepaid interest greater than 12 months?

further, would anyone know if rent or other business expenses can be deducted if paid 12 months in advance?

 

[Rolf Latham]

Hiya

I reckon if you can prove a commercial benefit in pre paying a normally deducted expense youd be ok. At the end of the day you are doing it to save money because for eg you get a % discount on your rent for eg

ta

rolf

 

[thefirstbruce]

thanks Rolf. Good point re getting a discount for paying in advance.

 

[Jakk]

A large contribution to your own SMSF.
I believe this is one of the best ways to legally lower your taxable income whilst still having control over the funds invested.

regards

 

[thefirstbruce]

thanks Jakk. I also wannted to be able to leverage off the capital aggressively, and I understand this is hobbled with SMSF.

 

[The Y-man]

I have asked a similar question before, but wouldn't mind some fresh input.
Would like to know what others are considering to 'pay the minimum legal amount of tax' pre June 30. After talking with a bunch of advisors, I have had:

- woodchip plantations (100% deduction but you can't leverage off it, or touch it for 7-10 years)

- 12 months prepaid interest on IP or margin loan for shares.

as I am a bit of a bear currently, I am being cautious on IPs and shares. any other suggestions appreciated. does anyone know if you can get a deduction on prepaid interest greater than 12 months?

further, would anyone know if rent or other business expenses can be deducted if paid 12 months in advance?

If you are a bit bearish on the share market, hedge funds perhaps?
There are fund which are 100% Geared (so you pay interest only - prepay 12 months to claim for this year) and capital protected (so in theory the most you can lose is your interest).

Cheers,

The Y-man

 

[geoffw]

thanks Jakk. I also wannted to be able to leverage off the capital aggressively, and I understand this is hobbled with SMSF.

It is possible to go into a joint venture with an SMSF- say you get the IP, and the SMSF provides the reno funding (with great care and professional advice of course)

 

[Peter 14.7]

Pull forward deductions from the year ahead.

Insurance on IP
Loan Repayments
Income Insurance

I think can be paid 13 months ahead and claimed in this year.

Advantage is top tax rate threshold is being raised next fin year, henc lower tax.

Does anyone understand the super co-payment thingy?

Is it worth it if you earn $50k or more per annum?

Peter 147

 

[ralph wiggum]

Hey guys - might be a stupid question here, but can you prepay interest on any IP loan, or is it only on certain types/lenders etc?
I have Suncorp Back to Basics loans - haven't read anywhere about paying interest in advance.
Cheers

 

[aef]

Super co-contribution thingy

Hey Pete,

The co-contribution cuts out at income of $62K so you will get some benefit at $50K.

The maximum rebate is paid at income of $28k and slides down to nothing at $62K.

Hope this helps.

A

 

[Peter 14.7]

Hey Pete,

The co-contribution cuts out at income of $62K so you will get some benefit at $50K.

The maximum rebate is paid at income of $28k and slides down to nothing at $62K.

Hope this helps.

A

Thanks Aef, it does help.

Welcome to posting on SS

Peter 147

 

[The Y-man]

Hey guys - might be a stupid question here, but can you prepay interest on any IP loan, or is it only on certain types/lenders etc?
I have Suncorp Back to Basics loans - haven't read anywhere about paying interest in advance.
Cheers

It is usually a choice you have when FIXING your interest rates. Usually you get a better rate if you prepay the year's worth of interest

Cheers,

The Y-man

 

[ralph wiggum]

It is usually a choice you have when FIXING your interest rates. Usually you get a better rate if you prepay the year's worth of interest

Ok, thanks for that Y-Man

 

[redwing]

Prepaying

I usually Pre-Pay Council rates etc, pulls it forward into this FY..no discounts, though it's a quick return.

Any other TIPS?



REDWING

 

[XBenX]

Guys,

With the budget tax cuts make sure you do some tax planning and pull as many deductions into this year as you can....

Obvious I know - but still worth some extra thought!

 

[Kenny]

Someone mentioned in an earlier post one of the best options was to make a contribution to their Super.

With the Budget announcement of the abolition of the 12.5% surcharge, does this lessen the appeal for someone on the top tax rate?

Can someone with better maths skills help me weigh up the benefit of the deduction from a higher tax rate but with the 12.5% as opposed to contributing after June 30 and having potentially 12.5% more.

I guess one could always do both

Regards.

Kenny

 

[Mike F]

For those with units, are you considering pre-paying strata contributions for next year - is this then able to be deducted in full this year?

 

[Peter 14.7]

Someone mentioned in an earlier post one of the best options was to make a contribution to their Super.

With the Budget announcement of the abolition of the 12.5% surcharge, does this lessen the appeal for someone on the top tax rate?

Can someone with better maths skills help me weigh up the benefit of the deduction from a higher tax rate but with the 12.5% as opposed to contributing after June 30 and having potentially 12.5% more.

I guess one could always do both

Regards.

Kenny

Hi Kenny, first surcharge onlapplies to high income earners. I dont know what that is , but it may not effect you.

Any accountants out there will the kick in point.

The budget does encourage paying costs this year for higher deduction than next.

Peter 147