Ways to minimise tax bill this year

Hi folks,

This is the first time I've had to think about minimising my tax bill (yay?). I'd love some help pointing me in the right direction for good, legal, ways to reduce my tax.

Key points:
- CGT event this year made about $200k capital gain
- I'll get most of the 50% CGT reduction
- I have one IP that I will pre-pay interest for (approx $15k)

What are some other things I could do? I'm not interested in paying into my super. If I thought anyone would give me a margin loan I'd think about buying some managed funds and pre-paying interest on that too. But I doubt anyone will lend me any money for anything (unemployed, living overseas).

Also, a side question, if you pre-pay interest on an IP to reduce your tax bill, but then you sell the IP, does that create any tax issues?

Cheers, Luce :)
 
Also, a side question, if you pre-pay interest on an IP to reduce your tax bill, but then you sell the IP, does that create any tax issues?

Yes. You have a fixed loan so will have break costs, but you have already paid interest in advance for the year ahead so any refund of interest refund will be added back.

Generally in your situation all you can do is to make sure you have claimed every expense you can think of. You only have a month to go so there is not much time left
 
Some issues - You said you are living overseas. Are you a tax resident or not ?? This is well worth exploring since a non-resident is taxed very very differently to a resident.

Non-Resident
- ASX listed shares aren't subject to CGT;
- Australian property may lose some or all of the CGT discount...Effectively doubling the tax on the property !!
- Only Australian source income is considered
- Foreign tax on the Australian CGT as well !


If you prepay interest in 2015 and then sell part way through 2016 tax year you may have these issues:
- Breakcost on a 1 yr fixed rate loan (minor);
- A need to amend the 2015 tax for the bank refund of the overclaimed prepaid amount they will pay you (ie you pre-paid 12 months but only ended up incurring 3 months)
 
Its around this time of year I suggest anyone with a IP consider the specialist tax break that wasn't mentioned in the budget. It works the same way but helps property investors. And it has no $20K limit.

Works this way...
1. Contact me
2. I invoice you $25K or more. Whatever you want.
3. You pay me. No card surcharges.
4. You claim a $25K tax + deduction for my advice in reducing your tax.

Who wants to call me.

:D
 
Its around this time of year I suggest anyone with a IP consider the specialist tax break that wasn't mentioned in the budget. It works the same way but helps property investors. And it has no $20K limit.

Works this way...
1. Contact me
2. I invoice you $25K or more. Whatever you want.
3. You pay me. No card surcharges.
4. You claim a $25K tax + deduction for my advice in reducing your tax.

Who wants to call me.

:D

My practice will match this offer!
 
Its around this time of year I suggest anyone with a IP consider the specialist tax break that wasn't mentioned in the budget. It works the same way but helps property investors. And it has no $20K limit.

Works this way...
1. Contact me
2. I invoice you $25K or more. Whatever you want.
3. You pay me. No card surcharges.
4. You claim a $25K tax + deduction for my advice in reducing your tax.

Who wants to call me.

:D

I can't find your bank details on your page. I want to buy two! :p
 
I have it on good authority that the first 10 people who sign up with Paul will get a free depreciation report from fullylucky. Be quick though, strictly the first 10 people only.
 
Thanks for the replies guys. And thanks for the offers of specialist tax advice, lol.

I've obviously misunderstood the prepaying interest concept. My loan is variable. I thought there was some magical thing the banks did to come up with a number. I don't want to fix my loan, so I guess I won't prepay interest.
 
Thanks for the replies guys. And thanks for the offers of specialist tax advice, lol.

I've obviously misunderstood the prepaying interest concept. My loan is variable. I thought there was some magical thing the banks did to come up with a number. I don't want to fix my loan, so I guess I won't prepay interest.

A years prepaid interest is the max tax rules allow. So the bank does a one year fixed rate and charges the interest to the loan in June. You then make repayments through 2016 (and they charge no interest).

Fixing for one year is no great issue or risk unless you are thinking of selling !
 
Hell I will buy them each a BMT report. Stop making me look cheap. I have a reputation to uphold. Trust me.

Who wouldn't trust someone who banks with the First People's Bank of the Republic of Nigeria as opposed to the other bank the People's Bank of the Nigerian Republic.
 
A years prepaid interest is the max tax rules allow. So the bank does a one year fixed rate and charges the interest to the loan in June. You then make repayments through 2016 (and they charge no interest).

Fixing for one year is no great issue or risk unless you are thinking of selling !

I'm waiting for the obligatory thread from wylie "Argh, Wesuck hasn't sorted my prepaid interest payment and it's 11pm June 30th"! :p

pinkboy
 
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