How To Minimise Your 2023 Tax Bill

The end of the tax year is edging closer. If you haven’t planned how you will maximise your income and save some tax, take note! The most effective strategies are often the simplest and can be applied before 30 June this year whilst others should be considered for next year. Here are some from both categories to consider:

Pre 30 June

• Defer non-essential income until the new financial year.
• Review your investment portfolio prior to 30 June to determine whether investments should be sold to offset any capital gains or losses made throughout the year.
• Ensure you are eligible for capital gains tax concessions by holding assets for more than 12 months.
• Maximise tax deductions through super contributions. Alternatively, make a contribution into super for your spouse – this could provide you with a tax offset.
• Prepay next year’s interest on investment property, margin loans, or protected equity loans, and claim the deduction this year.
• Ensure you review income distributions from family trusts. You can lose franking credits in some circumstances if a family trust election is not made.

For 2023, some other key considerations are likely to include:

• Reviewing whether you can still allocate trust distributions (from your Family Trust or Discretionary Trust) to adult children or parents as a result of the newly released ATO Tax Rulings
• Using a Family Trust or a “bucket company” to cap your tax at 25% or 30%

Next year

• Make sure you hold assets in the most appropriate tax structure. Individuals, companies, trusts and super funds are all taxed differently on their capital gains and income.
• Use franking credits to reduce tax on lower taxed entities like super funds and lower income earners. Remember that excess franking credits are refundable.
• Split income wherever possible to take advantage of the progressive tax system.

In an ever-changing and complex world, seeking professional advice can help you through the maze. We invite you to contact us to explore your individual tax planning opportunities further… but please don’t leave it until the last minute.

 

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The sooner we start planning the better! If you haven’t scheduled a meeting with us, get in touch with us today!