All Topics / Creative Investing / creative ways to save tax…

Viewing 1 post (of 1 total)
  • Profile photo of crashycrashy
    Participant
    @crashy
    Join Date: 2003
    Post Count: 736

    We have heard some ways to MAKE money, how about some ways to save tax?

    Here is one your financial planner doesnt know about:

    SELF FUNDED INSTALMENT WARRANTS

    These are a great tax effective investment for those in the top tax bracket.

    Rather than receive cash dividends (which are assessable income) the dividend is used to pay back the loan. The franking credits however are still yours to use.

    You could therefore greatly reduce your tax liability by simply changing the investment vehicle.

    here is an example:

    taxable income – $50,000

    tax liability – $11,172

    buys 10,000 NABWSA @ $12.00

    franking credits = 70c x 10,000 = $7,000

    new taxable income = $7000 + $50,000 = $57,000

    new tax liability – $14,232

    less franking credits received – $7,000

    tax liability – $7,232

    money saved = $3,940

    Had you invested in another instalment, one with regular cash dividends, there may have been extra tax to pay (if your marginal tax rate was above 30%).

    OK, we may not have a lazy $120k to implement this, but if we did and we poured it into any old shares our tax liability would be far greater…so its a strategy for those with big share holdings (or those planning to build a big holding) not for your average taxpayer. Just one example of the many ways you can be crafty with shares.

    other tax ideas?

    http://www.posigear.8k.com
    Positive Geared Share Investing

Viewing 1 post (of 1 total)

You must be logged in to reply to this topic. If you don't have an account, you can register here.