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Before purchasing any major asset there is a checklist of things to consider and this includes, but is not limited to:
a) Income Tax
b) CGT
c) GST
d) Stamp Duty
e) Payroll Tax
f) Estate Planning
g) Asset Protection
h) Finance
Both the immediate and long term future affect on all of these needs to be considered.
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Income tax is worked out by the formula:
Tax Payable = Taxable Income x Tax Rate
With taxable income being worked out by working out the assessable income less tax deductions.
Taxable Income = Assessable Income - Deductible Expenses
So it follows that tax can be reduced by reducing your taxable income which could be done by either or both of reducing your income or increasing your deductions.
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This episode is a brief introduction to estate planning which involves preparing assets for when you are no longer in control. This includes setting up enduring powers of attorney, wills but also working through the passing of control of companies and trusts so that they fall into the right hands.
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Trusts are the second greatest English invention (after the sandwich). Here I give a brief explanation of what a trust is.
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Interest can be deductible because of section 8-1 ITAA97, but it will only be deductible to the extent that it is from a loan connected to the production of assessable income.
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Two or more joint owners of assets have to make a choice as to how they own them.
It can be either:
a) As joint tenants
b) As tenants in common
There are different estate planning consequences between the two, which many seem not to be aware of.
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This podcast is hosted by Terry Waugh, aka Terryw, who is a solicitor, chartered tax adviser, mortgage broker and former financial planner. He runs a law firm and a mortgage broking company. www.structuring.com.au
The 3 areas of “structuring” are:
a) Ownership Structuring
b) Loan Structuring
c) Transactional Structuring
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