How to make investment property more tax effective

Take advantage of income splitting

 

 Take advantage of income splitting

 

Another strategy that should be canvassed is income splitting. Couples should consider making investments in the name of the lower earning spouse to minimise the tax payable on income distributions and capital gains. The exception to this is negatively geared investments, which work to best advantage when the higher-earning spouse holds ownership.

 

Another option in the same vein is to hold investments in a family trust, with adult children as beneficiaries. Children aged 18 or over are entitled to the full adult tax thresholds, which can be very handy during the years when they are in full-time study.

 

Investments in discretionary family trusts offer maximum flexibility and this strategy can allow the trust to distribute income from its investments in a way that provides significant tax savings.

 

Investors should be wary, however, of using trusts for negatively geared investments, as gearing generates tax losses that can be trapped in a trust.

 

Rands Financial Services can help you assess your investment /refinance health check just head to our website www.randsfinancialservices.com.au or call  0434 391 331.

 

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