This is the right time to start thinking about the end of the financial year. May is Federal Budget month — and we need time to understand what the Budget actually means for your tax position, not just the headline announcements. By the time June arrives, many of the strategies we could act on are simply no longer available.
So what exactly is tax planning?
Over your lifetime, you’ll pay a lot of tax. For most people who own a business or investment property, we’re talking hundreds of thousands of dollars — sometimes more. What many people don’t realise is that a significant portion of that tax doesn’t actually have to be paid. Not by doing anything questionable — simply by making the right decisions at the right time.
A simple way to think about it
Think of tax planning like maintaining a car. You could wait until something breaks down, or you could do regular servicing and catch problems early. Tax planning works the same way. Small decisions made now — about how your business is structured, where your investments are held, or how your super is set up — can have a significant impact on the tax you pay years down the track.
Tax planning has two parts
The first part is about right now. In April and May, we look at how your year is tracking, estimate what you’re likely to owe, and identify strategies to reduce it before 30 June — whether that’s contributing extra to super, timing a business expense, or structuring trust distributions. Whatever we suggest, we make sure it actually puts you ahead.
The second part is about the long game. This is where the bigger savings often live. We look further ahead to spot opportunities that might take years to set up, but could save you — or your family — a significant amount of money.
Some real examples of what that can look like
- Buying an investment property with a plan to move into it after retirement can reduce the capital gains tax payable by your estate to zero — but only if the strategy is understood before the purchase.
- Super you leave to your adult children can be taxed at up to 17%. There are strategies to reduce or eliminate that tax, but they need to be set up years in advance.
- The way your business is structured today determines how much tax you pay when you sell it. This is something we review each year so you’re never caught off guard.
How we approach it
We start where you are right now. We work through your expected income for the year, look at what tax is coming due, and make sure nothing catches you by surprise. Then we zoom out and look at the bigger picture — business structure, asset placement, super efficiency, and even how your parents’ estate is set up, because assets transferred through an inheritance can sometimes carry a tax bill that could have been avoided with earlier planning.
Speak with your LT Accountant to arrange your tax planning.
Disclaimer
The information contained in this publication is for general information purposes only, professional advice should be obtained before acting on any information contained herein. Neither the publishers nor the distributors can accept any responsibility for loss occasioned to any person as a result of action taken or refrained from in consequence of the contents of this publication.