Investments are great, but they come with a cost! Taxes can take a big bite out of your returns. Therefore, don’t you think it is crucial to understand how to make wise investments to pay more taxes than you’re supposed to? There are several ways to facilitate tax minimisation. If you wish to learn some of the ways, we have enlisted a few of them -
Superannuation
Since capital gains are only taxed at a 10% rate, and income produced in super typically has a maximum tax rate of 15%, super can be one of the most effective and tax-efficient solutions. Here’s how you can reduce taxable income through superannuation:
- Sacrifice in salary
- Transition to retirement
- Business owner/ retiree commission
- Self-managed super funds
You can always hire a tax advisor in London to help you make the best investments at low tax rates.
Property
When you make property investments, most of the taxes are deductible. This includes the cost of borrowing money, interest, advertising, upkeep, and commissions. Additionally, you can deduct investment losses from other sources of income to lower your taxable income.
Investment Bonds
A reputed financial advisor in London will guide you through easy ways to evade taxes in investments. Investment bonds are one of the ways of doing it! These bonds are usually taxed at the company rate and are said to also become tax-free after ten years. Another benefit is that you are not required to report the earnings on your tax return because you are taxed internally (inside the bond itself).
Family Trust
A discretionary family trust enables the distribution of income and the associated tax burden among family members, which may be advantageous for those with higher incomes.
The same applies to asset splitting: your overall tax burden might be decreased by transferring an asset into the name of a family member in a lower tax bracket.
These are some effective ways to minimise taxes or escape them in investments. Hiring a professional tax advisor in London could be the best way to go if you want to make no mistakes.
