All Topics / Legal & Accounting / time is running out…CGT problem….

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  • Profile photo of ruminrumin
    Join Date: 2005
    Post Count: 25

    Sorry if this should be in the leagal/accounting section…To me the HELP NEEDED sounded more appropriate..
    With time running out before the June end deadline I was wondering if anyone has any ideas..
    After ALL deductions ( some of the posts I searched gave good lists)I still have $68,000
    assessable Capital $21,383 tax to pay!!!
    My accountant has given some options of reducing the above number by $14,000 (my max)for super contributions ..
    so that would mean $68,000 – 14000 =54,000
    tax payable $16000
    but that means I am spending 13k to reduce my tax by 5 k ,right…(albeit using 13k for invest.)
    Option 2 mentioned was a tree investment 100% deductable (great-southern)and to invest 50-60k in that…?
    Anyone with good or bad experiences with these 100% tax tree projects?Are there any other options to invest in to 100% offset the assessable amount?Please help I’m living overseas which makes everthing a tad harder so I would really appreciate your help..(It’s my first Qestion on the board so go easy….)Thanks

    Profile photo of TerrywTerryw
    Join Date: 2001
    Post Count: 16,213

    There are various share products available where you can borrow 100% with the ability to prepay interest. Macquarie Bank has a few of these products. If you prepay interest, you may be able to get your taxable income down and thus reduce your capital gains tax payable.

    I am not sure about trees, a lot of people have been burned big time by investing in these sorts of products. With the Macquarie product it is 100% capital guarranteed. So if the shares go down your capital is preserved and you stand only to lose the interest paid – but this is partly offset by the tax deductions.

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    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide)

    Profile photo of jodieleighjodieleigh
    Join Date: 2005
    Post Count: 14

    If your interested in tree investments, we did the same thing a few years back and got a 100% tex deduction on our purchase. Were very happy with the whole affair and now 6 or 7 yrs later were getting closer to our investment returns. Try Pawlonia Forrests we were quite impressed by them.

    Profile photo of ruminrumin
    Join Date: 2005
    Post Count: 25

    Thanks Terryw and jodieleigh for the replies..
    Why,are these 100% offset investments all agricultural?I found trees(various types)wine and truffles! Any preference?Pawlonia,sandalwood,teak?
    Also I found a few small sites on Aussie movies to invest in that have A-10 approval…
    Anything else anyone knows of?

    Profile photo of hmackayhmackay
    Join Date: 2004
    Post Count: 197


    Great situation to be in. The more tax u pay the better off u are.

    Living overseas….your tax situation may be different to permanent residents….suggest you seek advice from another accountant.(perhaps a specialist in Xpats)

    Any assets ie shares that you could sell for a loss?

    Any payments you could make in advance?

    Never bought trees but why would the Gov give 100 tax deduction for these? Very High risk I would guess.

    Enjoy the profit pay the tax.


    Profile photo of ruminrumin
    Join Date: 2005
    Post Count: 25

    Thanks for the replies…
    an update…I decided not to go down the tree route as it would have tied up money for a long time and not offset my tax just deferred .
    My accountant made a lot of mistakes but it was my fault not to double check…(although I always thought that’s what you pay a goodone for not to have to research every rule yourself?)
    As Terry pointed out the prepaying interest was the best way but as I have an asset line loan my banks’cutoff date had expired to get the paperwork through in time..
    The only things left were some necessary repairs and full depreciation reports…
    I should have the finally tally of tax to pay soon..and as hmackay so kindly pointed out YES, I should be happy I have money to pay tax on..

    Profile photo of DDDD
    Join Date: 2004
    Post Count: 508

    Hi there, i take it you have had a professional depreciation schedule done on all of your investments?? If not thats first. Secondly we pay about $3k a year for the accountant in sydney and she is wonderful. Mr tax man hasnt seen any money for quite some time.
    Get an accountant that is a property investor themselves and you should be right. After all, they want the best return for themseles so would be 110% up to date with everything.

    Good Luck


    Buyers Agent (Dip Financial Services(FP)
    Don’t sweat the small stuff,and it’s all small stuff!!

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