TAX PLANNING 2020

TAX PLANNING 2020

TIP #8 – INVESTMENTS

Do you hold investments or have carry forward capital losses?   Are you declaring a capital gain on the sale of CGT assets in 2020?

Well right now may be the time to take action on your investments to achieve some tax savings in financial year 2020.

Obviously at this time of year, we are referring to assets such as shares or other investments that can be disposed of quickly.  If your investments are property, you can certainly start planning to take action into the new financial year or years ahead for wealth and tax strategy.

Here are some tax saving options around capital gains / losses on the sale of your CGT assets.

🚩 You have carry forward Capital Losses from prior year(s).  Consider selling investments that result in a Capital Gain to utilises these carry forward Capital Losses.

🚩 In the current year you will be declaring a Capital Gain on disposal of CGT assets.  Consider selling investments that result in a Capital Loss to absorb your Capital Gains.

🚩 You are in a high tax bracket in 2020 and you are considering selling investments.  If your investments are expected to make a Capital Gain, considering holding on to those investments until after 30 June such that the Capital Gain on their disposal falls next financial year.

Things to be aware of when taking action with CGT Assets:

✅ Ensure your decisions are based on wealth strategy first and foremost, tax strategy follows

✅ If considering disposing of a CGT asset, think about whether it is the right time to sell – or not

✅ If considering holding on to an investment, think about how valuable and useful this investment is, is it holding you back or draining your wealth profile?

✅ Other considerations are the extent or volume of your investments, are they housed in the right structure?

✅ You may be paying tax at the highest bracket on your investment earnings, because your “other income” is in the highest tax bracket.   Consider restructuring investment distributions going forward.

*** IMPORTANT *** If you do not have a TAX PLAN 2020, get in touch and ensure you are well prepared in advance of financial year end.  As a result of Covid-19, businesses are in line for material tax savings never experienced before, all designed to assist your business through the pandemic.

If you have any questions at all regarding financial and business matters, please don’t hesitate to contact us.