When it comes to investing, there are investment strategies you can utilise to minimise the amount of tax you pay.

Contribute more to super

Salary sacrifice contributions can help reduce the amount of tax you pay whilst building your retirement savings. The contribution to super is made before income tax is deducted from your wages.  Whilst your money is in super, tax paid on fund earnings is usually much lower than other investment earnings outside of super.

Tax effective investing

Some investments are more tax effective than others. Growth investments such as shares and property often receive more favourable tax treatment. For example, capital gains tax and earnings tax on shares may be lower than the tax on fixed interest investments.

Investment loans

Borrowing money to invest (gearing) can also be a method of managing your tax obligations. If the cost of borrowing exceeds the income generated by the investment, you may be able to offset the loss against other taxable income.  Prepaying loan interest in advance can also be a way to claim a tax deduction in the current financial year.

Selling assets

Timing the sale of assets can affect the amount of tax you pay. For example, selling shares more than 12 months after the original purchase date would incur capital gains tax at a lower rate.  In some circumstances, a capital loss can be carried forward to a financial year when a capital gain applies – therefore incurring less tax on that gain.