Taxation is a financial subject close to the hearts – and savings – of many people. The topic is certainly one bandied about in any Federal election, with the major parties vying for the vote with proposed tax cuts on the one hand, and spending promises on the other.
Tax In Australia
Australia has a high standard of living, partly because our taxes pay for the structures that support it. Australians enjoy a consistently high quality of life ranking (the UN placed us at #3 in their 2017 Human Development Index, after Norway and Switzerland). We pay more tax than Americans, but we also get universal health care, paid parental leave and an income-based student loan repayment system.
In OECD rankings, out of 34 countries, Australia ranked 13th for the top marginal rate of tax in 2016; 16th when including social security contributions.
But there’s a balance to be maintained, between supporting and continuing to enjoy Australia’s excellent quality of life – as measured by health, education, and gross national income per capita – and being savvy with our investments and tax obligations to ensure individuals are not over-taxed.
Fortunately, Governments have policies and regulations which set up deductions, rebates and other tax-related incentives to help individuals and businesses get the biggest bang for their income buck.
How To Reduce Tax Using Investments
Calculating how best to manage and off-set income from property, superannuation, shares and other investments can be complex. As ASIC’s MoneySmart site points out, it begins with understanding your current tax rate and the kinds of tax-effective investments that best suit you.
You can’t avoid paying tax but you can reduce the amount you pay each year with smart strategies including investment through trusts and salary sacrificing.
If you would like to speak with a professional investment adviser about tax strategies and your portfolio, contact United Global Capital today on 03 8657 7640 or email [email protected] for a no cost, no obligation consultation.