Five Tips to Minimise Your Tax
- April 23, 2019
- by Endorphin Wealth Management
Tax time is approaching! For some of you, this will bring a sense of dread. A reminder of your income you have foregone over the last 12 months to keep our society functioning. For our clients, we’ve implemented numerous strategies to legally minimise their tax so they have more money available to invest as they see fit:
Investment bonds have returned to favour of late and their earnings don’t need to appear on your tax return.
Earnings from the investments in the bond are excluded from personal income because the bond providers pay tax at 30% internally – meaning there is nothing for you to declare on your tax return. However, to receive the full tax benefit, you must leave your money in the bond for a decade.
Bonds can be suitable for; younger investors on tax rates above 30%, executives under the age of 60 who may have maxed out their super contributions or retired investors who can no longer contribute to superannuation.
Discretionary Family Trust
A trust is an investment structure that allows assets to be controlled by one or more people on behalf of the beneficiaries. A discretionary trust means that the trustee can nominate which of the beneficiaries receives the income and capital from the trust. This can be a good technique for high-income earners in the top tax bracket, as they can distribute trust income to family members on lower tax rates. You can even distribute income to beneficiaries with no other income and utilise their tax-free threshold.
There are some compliance costs you will encounter along the way and all decisions made by the trustee need to be properly documented, but these costs may be deductible depending on your situation.
An Investment Company
An investment company can serve to keep funds accessible and “liquid” outside of superannuation. However, you will not be able to access the 50% capital gains tax discount so it is may be more suitable for income producing assets to be held in a company rather than capital growth assets.
Assets such as managed funds, shares, direct property can be purchased in the name of the investment company (as opposed to personal names) depending on your risk profile and portfolio needs. When income is distributed, the recipient pays tax at their marginal tax rate less 30% company tax. This works in similarly to a discretionary trust in that you may wish to distribute income to shareholders on lower income tax rates – for example, someone that has only worked part-time over the year.
Whilst there are additional costs with setting up and maintaining a company, the benefits are the ability to choose the timing of the distribution to suit the individual and minimise tax payable.
Mortgage Offset Account
Placing your savings in a mortgage offset account has two major benefits for your wealth management. Say you have sold an asset and wish to hold cash for a short period of time; you may be tempted to place the proceeds into a high-interest savings account with returns between 1-2.5% currently. You will of course pay tax on the interest in this account.
Instead, you could invest the money in your mortgage offset account to reduce the amount of interest payable on your home loan. With variable base rates between 3.5-5% currently, you would save this amount in interest and also not need to pay any tax for the benefit!
After-Tax Superannuation Contributions
Most people may still benefit from pre-tax (concessional) contributions, also known as salary sacrifice despite recent cap changes. Given these contributions are subject to a maximum tax of 15% inside super as opposed to post-tax contributions which are subject to tax at your marginal rates prior to contribution; which can be above 47% for high income earners.
The key contrast remains for those investment assets held within your own name for more than 12 months. Inside super capital gains are assessed at 10% and earnings taxed at 15%; whereas outside super, capital gains are assessed at up to 50% (capital growth) and investment earnings (income) are again assessed at your marginal tax rate.
How We Can Help
It is important to get expert advice from Endorphin Wealth Management regarding tax effectiveness to maximise savings and boost your financial health
For an obligation free discussion, call us on 03 9190 8964, or email us at email@example.com
The information, concepts and ideas used in this article are provided for general information only and should not be taken as constituting professional advice from Endorphin Wealth Management or Lifespan Financial Planning.
You should consider seeking independent legal, financial, taxation or other advice to check how this information relates to your unique circumstances. We cannot be held liable for any loss caused, whether due to negligence or otherwise arising from the use of, or reliance on, the information provided directly or indirectly or by use of this article.
- May 2019
- April 2019
- March 2019
- February 2019
- January 2019
- November 2018
- October 2018
- September 2018
- August 2018
- July 2018
- May 2018
- April 2018
- March 2018
- February 2018
- January 2018
- December 2017
- October 2017
- September 2017
- August 2017
- July 2017
- May 2017
- March 2017
- February 2017
- January 2017
- December 2016
- November 2016
- September 2016
- July 2016
- June 2016
- May 2016
- June 2015
- May 2015
- April 2015
- March 2015
- February 2015
- December 2014
What our Clients Say
Rob has been our advisor for around 6 months now and to say we’ve been happy with his service is a huge understatement. His attention to detail, responsiveness and general customer service are exceptional. We’re now on the path to a much brighter retirement and hopefully reaching it a few years earlier too!
- Luke Fleming
Glenn Malkiewicz has been a great help in setting up my finances for post retirement. He explained everything clearly in words I could understand and answered my questions promptly and succinctly. I now feel very comfortable about my future going forward. His friendly manner makes him a pleasure to work with. I look forward to consulting with him in the future.
- Michael O’Mara
I’ve recently settled back in Australia, and Rob has been a godsend to me and has quickly become a trusted advisor. After living abroad for 12 years, he has helped me get orientated here and eased many of my anxieties about getting organised in a new country. Rob is always enthusiastic and keen to help out. No problem has been too big or small for him. He is so easy to work with, he has been reliable and available and he responds my silly emails in an impressive time frame. Rob makes a consistent effort to make sure you are up to speed and pleased. I’ve seen great results so far and I’m very glad I’ve chosen Rob and the team at Endorphin. Top notch group of professionals!
- Kimberly Rosal
It’s always a wonderful experience working with rob rich. His financial advice, care and customer service is beyond exceptional and can trust that we have our finances in the right hands. Only one phone call away rob is always happy to assist and we will definitely continue to recommend him to friends and family
- Deanne Palza
My husband and I wanted to find a trusted partner to advise us on our financial plans and help grow our wealth. We met with a couple of firms before meeting with Rob and they just didn’t grab us and it just didn’t feel right. One meeting with Rob and we were both sold on the spot that Rob was our man. And we haven’t looked back. Rob offers a very prompt, efficient and client focused service and always keeps us up to date and on track with what is happening with our portfolio. We couldn’t be happier with the service we’ve received from Rob and wouldn’t hesitate in recommending him to others looking for a trusted financial advisor.
- Simone Fleming
5 Stars to Rob Rich. Fantastic to work with, caring nature and a Human with a gold heart. Highly recommended.
- Tania Sasik
Phillip and the team are completely focused on delivering excellence for their clients.
- Rob Ryan
What an amazing man! Down to earth, realistic and honestly knows his stuff. I have never felt so comfortable leaving my finances in the hands of another person and all it takes is one chat with Robert and he will put you at ease. Thanks, Rob
- Libby Arnold
My wife and I have been fortunate enough to work close with Robert and he has been amazing. Its really special to feel like you are actually cared for and know I am in good hands with our plans. I recommend Robert and his team to anyone. Thank you again for making our experience so memorable.
- Pep Karalus
It was a pleasure to engage Rob to assist with a review of my fiances which included financial modelling of 3 options for my property plans and a review of personal insurances tailored to my needs. He displayed great patience and understanding throughout my journey and gently sent reminders for paperwork he needed without being pushy. He was contactable in person, email, text messages even outside of standard business hours. The plan he produced was not only tailored to me, but his approach and style he adopted was very tailored as well. The future of Financial planning in in safe hands with approaches like Rob’s.
- Amrish Jusrut
Rob and Phil and their wonderful team provide excellent service with the unique combination of award winning professional insights, personalised service and real and genuine care about our future
- David Klingberg
Robert is one of the nicest and most knowledgeable financial advisors I have come across. After previously dealing with advisors that left me disheartened Robs patient and understanding approach mixed with his positive attitude and in-depth knowledge is unparalleled .
- Jordan Adams
I would highly recommend Rob as a caring and passionate financial advisor. Before meeting with rob I felt very apprehensive about discussing our financial situation but rob quickly put my mind at ease and made me feel very comfortable. He asked lots of questions in order to ascertain our true situation and tailor advice accordingly. Beforehand I was nervous about our financial future moving into retirement but his advise showed us how we cam move forward with confidence, taking the worry away. We will be staying with rob for the long term
- Alison Taylor
We have been working with Robert since February this year, just prior to the birth of our second child. He has been a pleasure to work with and has provided comprehensive financial advice to us. Robert takes the time to get to know you and your family so that he can fully understand your financial situation and what your plans and goals are for now and into the future. He is extremely knowledgeable and very passionate about his job. He is a great communicator, responds to calls and emails promptly, and displays a genuine interest in our family. I have no hesitation in recommending Robert and Endorphin Wealth Management
- Pauline Opie
Rob Rich has a well-earned reputation for providing articulate and direct financial advice and he has been the consummate professional for me, particularly regarding my superannuation. His intelligent approach and outstanding knowledge has been second to none. He's a great communicator and has done a fantastic job of translating complex financial issues and concepts into terms that are easy to understand. I would certainly recommend Rob and Endorphin for his well considered and practical advice.
- Melinda Fabrici
Phillip has been my financial advisor for the last few years and I could not be happier. The outstanding retirement planning and financial advice that Phillip provided has put me in the best possible position to enjoy my future with confidence, for which I am extremely grateful.
- Judy Anderson
Phil is attentive and super communicator, great advisor.
- Peter Sagar
Love working with Robert. He is highly skilled, practical and empathetic. Nothing is a problem and he goes ‘above and beyond’. I have no hesitation in recommending Robert as an excellent financial advisor.
- Rebecca Carter
Phil and the crew are very solid financial planners/advisors and provide excellent customer service.
- Ian Johnson
Great company, wonderful people and a genuine focus on delivering the best for clients.
- Gavin Tan
Great advice. Worth listening to.
- Natasha Trenoweth
Excellent service and advice, highly recommend!
- Alex Groh
Phillip and the team at Endorphin have looked after my financial affairs for a few years now and I could not be happier. They are pro active with communication, experts at investment advice and are friendly and great to deal with. They are my trusted financials professionals. I highly recommend them if you are looking for a financial planning team that will look after you for the future.
- Stuart Coulthard
Phillip and the team are experts in their field of financial advice and investments.
- Paul Drossinos
Great financial planning and advice.
- New Dawn Pavings
Robert Rich is a gun and has been a pleasure to work with, he spent a lot of time asking questions and listening to both my husband and I to get a deep understanding of our current financial situation of who we are and where we want to be. His advice has been comprehensive and easy to understand. The genuine interest and enthusiasm he has demonstrated has made the whole experience to date, fun and engaging (it has also been awesome to see some great financial results!). Rob is a great communicator and is always available to chat, meet up or respond to an email. We wish we had seen Rob earlier, and plan to have him as our advisor now and into the future, I have and will continue to recommend him and his services.
- Ellen Bond
Rob has been fantastic helping us set all our financials in order. We didn't want to have to worry about any of this stuff day to day. Rob put together a set and forget strategy that will see us in good shape for the future. Good guy, good advice, great help. Thanks again Rob
- Andy Wright
My husband and I had a wonderful experience with Rob. He is genuine and honest. He has done amazing things with our finances to ensure our future is set up the right way. He has gone above and beyond our expectations. I highly recommend Rob, he is an expert in his field.
- Anthea Husing
love working with Robert. He is highly skilled, practical and empathic. Nothing is a problem and he goes ‘above and beyond’. I have no hesitation in recommending Robert as an excellent financial advisor.
- Rebecca Carter
Robert has managed our finances over the last 12 months as if they were his own. He has an eye for detail and is incredibly enthusiastic. We have recommended him to all our friends & family.
- A. Miles
Rob has handled our finances for some time now. He provided us with sound advice and options. I highly recommend his services.
- Mathew Quinton
Robert Rich provided me excellent financial advice and assistance in finding the right insurance for me. He was incredibly patient, and I'd recommend him without hesitation.
- Edward Murrell
Rob has been helping me with my finances for just over 12 months now and i couldn't be happy, he is a wealth of knowledge and is amazing at what he does.
- Paul Scott Ray White
Phillip and the team provide quality advice. They carefully explain the available options and clearly set the client's interests as the priority.
- Jon Sutton
Rob has provided fantastic advise and clarity to myself and clients
- James Ruddick
Great guys! Amazing financial advice.
- Jay Boston
I cannot say enough about their professional manner and would highly recommend anyone I know to seek their services
- Heather B
Your knowledge of the financial market is up to date and your approach to my portfolio has been proactive
- Michael S
Thanks to Endorphin, I am now on the path to that dream of mine
- Jake F
The plan has definitely made a big difference to my lifestyle
- Josie W
It has been quite exciting and very comforting to have Endorphin looking after my financial future
- Susan A
They provided me with a sense of direction and security that I did not have previously
- Michelle C