CALL US08 8113 5351

Tax Effective Investments

Are you maximising your opportunities in relation to taxation? We can work with you and your accountant to ensure you are aware of all taxation strategies that may be available to you. Strategies that will look to improve your existing taxation position whether that be using salary sacrifice, pension funds in retirement, a transition to retirement strategy or using shares that pay franking credits.

What is salary sacrifice?

Salary sacrifice is an arrangement between you and your employer, which involves giving up part of your pre-tax salary in exchange for an alternative benefit, such as superannuation contributions.

Arranging a salary sacrifice may be beneficial to you. However, salary sacrifice into superannuation needs to be looked at carefully, as there are some important issues to consider.

What is a pension fund?

An account based pension is a product that you can buy with a lump sum from a superannuation fund to give you an income during your retirement.

Account based pensions can be purchased from superannuation funds using superannuation money.

Account based pensions and annuities give you the flexibility of having access to your money at any time. You can withdraw some or all of the money above the minimum amount as a lump sum (this is known as full or partial commutation).

For age 60 and over: All pension payments from a taxed source (where the super has been taxed in the fund) are tax free when paid to individuals aged 60 or over.

For under 60: Pension payments for individuals aged under 60 are taxed but offer a tax rebate of 15% with some income received being potentially tax free.

What is a transition to retirement strategy?

These pensions are available to those who are currently employed and have reached their preservation age (generally between 55 & 60). They pay a regular income but only allow access to the capital in special circumstances (permanent retirement from the workforce or reaching age 65). For those aged 60 or over they are tax free and for those aged between 55 and below 60 they attract a tax rebate of 15%.

This strategy has effectively enabled people to contribute further monies to super without impacting their cash flow.

What are franking credits?

A fully franked dividend means that the whole dividend carries a tax credit at the applicable company tax rate (currently 29%). This provides the maximum benefit of dividend imputation to shareholders.

A shareholder who receives a mixture of franked and unfranked dividend pays the usual income tax on the part that is unfranked, but is able to claim a tax credit for the part that is franked.

Franking credits are also passed onto managed trusts (both listed and unlisted), super and pension funds.

In May each year the Federal Government announces their Federal Budget for the coming financial year. This contains a number of changes to the taxation system which can be quite complex and wide ranging in their impact. We can analyse the changes to ascertain which ones apply to you and your financial situation. We then make sure you are aware of them and make any necessary adjustments to your financial plan.

Our Services

We offer a range of services, clink on the links below to see the services we offer, keep up with the latest breaking financial news as well as access to your portfolio.