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
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