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Do you understand the tax implications of investing? The key to building wealth is creating the right investment strategy. Consideration should be given to taxation and how you can achieve maximum returns on your investment. Preparing a financial plan and assessing your risk can be complicated. If you have any doubts you should seek professional financial advice.
Here are some of the most common Tax Effective Investments:
Superannuation
Superannuation is the most tax effective investment strategy as it is taxed at 15 per cent rather than your marginal tax rate.
Equity investments
Investing in shares has tax advantages not offered by other investment classes. Dividend imputation allows shareholders to receive credit for the tax that Australian companies have already effectively paid.
Borrowing to invest
When you borrow funds for investment purposes you can obtain tax benefits. So long as that investment produces an income, most of the costs of owning it are tax-deductible, including any interest paid on the loan.
Some important considerations
The returns you make on investing are taxable. The income you receive is subject to income tax. If you sell an investment for more than you paid for it, you may be liable for capital gains tax. If you are a self-funded retiree you will need to be aware of the tax rules. As these rules are complicated and always changing, you might need professional advice about the tax implications of investing.
Book your Free Consultation online today using our simple online Enquiry Form, for more information on Tax Effective Investments, or any of our financial services.
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