Episode Details

You're guaranteed two things in life – death, and taxes.

While taking care of your physical and mental health can lead to a longer, healthier life and stave of the death part, what can you do to legally minimize your tax?

Since everyone wants to pay less come tax time, in today's podcast I chat with independent financial advisor Stuart Wemyss about what options are available to you.

Minimizing Your Tax

Tax isn't necessarily a bad thing.

If you're paying tax, it means that you are making money.

But of course, there's no need to pay any more than you legally have to.

• Minimize your risk
  • Stick within the letter of the law, but explore legitimate ways to minimize tax liabilities
• Many more aggressive tax minimizing measures delay tax rather than permanently reduce it
  • Implementing these strategies may create costs (tax advice fees and documentation) and complexities
  • Sometimes, it's better to keep things simple
• Minimize tax pre-retirement
• Personal exertion income earners have few avenues to minimize tax
  • You can use negative gearing and/or contribute into super, but that's about it
• Contribute to your super
  • After 1 July 2021, individuals can contribute up to $27,500 per year into super and claim a tax deduction for this expense
• Borrow to invest
  • Borrowing to invest (to generate capital growth) often makes good sense, especially if you are more than 10 years from retirement
• Minimize tax on investment returns
  • If there are not many avenues to reduce the amount of tax you pay on your income, then at least make sure you don't pay too much tax on your investment returns.
  • Invest in assets that generate more capital growth than income
  • Make sure the investments are owned in the most tax-effective way
• Minimize land tax
  • Map out a plan and follow expert advice to minimize land tax as much as possible
• Consider capital gains tax
• Self-employment gives you more options
  • Make sure that your business is structured correctly
  • Stuart's new podcast, The Holistic Accountant, is a good way to learn more about this
• You should aim to pay zero tax in retirement
  • A couple can have up to $3.4 million invested in super, and not pay any tax
  • If you plan well, it is a reasonable expectation to pay little to no tax in retirement
• If you can't save tax, focus on investment returns
  • If you earn money, it's likely you will have to pay your fair share of tax. That's life
• Cheating is never worth it
  • The ATO is cracking down on dodgy deductions and the penalties can be up to double the tax plus interest

Resources:

Michael Yardney

Get the team at Metropole to help build your personal Strategic Property Plan Click here and have a chat with us

Stuart Wemyss – Prosolution Private Clients

Stuart's Book – Rules of the Lending Game

Shownotes plus more here: How to Minimize Tax – Your Largest Expense, with Stuart Wemyss

Some of our favourite quotes from the show:

"Tax isn't necessarily a bad thing. No one likes paying it, but if you're paying it, I guess it means you're making money." – Michael Yardney

"If you're going to own a property investment business, yo